A Connecticut advisor faces 25 years in prison after pleading guilty to defrauding clients of $2.7 million through a cherry-picking securities scheme, according to a news release from the U.S. Attorney's Office, District of Connecticut.
Jonathan Vincent Glenn, 54, of Greenwich, waived his right to be indicted and entered the guilty plea to one count of securities fraud Thursday in Hartford federal court, the release said. He also faces a fine of up to about $5.4 million. His sentencing is scheduled for December 28.
Glenn was barred by the SEC and Finra for the fraud last month. The SEC also fined him more than $3 million.
According to the SEC's complaint, Glenn, the founder and sole owner of Greenwich, Conn.-based investment advisory firm GlennCap, fraudulently allocated profitable trades to favored accounts at the expense of other advisory clients from at least January 2020 to March 2022.
The complaint said Glenn “placed trades on behalf of advisory clients, himself, or family members by trading directly in the relevant individual account, or by placing block trades in Glenn Capital’s omnibus account and allocating the block trades among the relevant individual accounts.”
The complaint noted that GlennCap’s written policy required Glenn “to determine and document the specific allocation of each block trade prior to execution, and to allocate block trades to individual accounts at an average price, but Glenn neglected to follow those procedures. Instead, he “waited until later in the day, after he could see whether the positions had increased or decreased in value, to allocate the trades to either favored or disfavored accounts."
The complaint noted that “the difference between the allocations of profitable trades and unprofitable trades is statistically significant” and “the probability that such a disparate allocation of gains and losses occurred by chance is nearly zero.”
Glenn gave the false impression that he allocated trades fairly and according to a pre-determined allocation methodology,” the complaint said. He was also alleged to have made false and misleading statements regarding his firm’s trading practices in materials given to clients and prospects, the court said.
In all, Glenn defrauded more than 45 clients of a total of more than $2.7 million through the cherry-picking scheme, prosecutors said.
Glenn entered the industry in 1993 with Kidder, Peabody & Cor. He went on to work for UBS Painewebber, Merrill Lynch, Morgan Stanley and Wells Fargo where he worked for five years until 2018, according to BrokerCheck. The SEC noted that he has since been registered with the State of Connecticut.