“Middlebrook’s losing trading strategy coupled with his misappropriation has resulted in near total loss of investor funds,” the SEC said.
EIA and Middlebrooks did not respond to a request for comment on the case.
The SEC’s complaint charges EIA and Middlebrooks with violating the antifraud provisions of the federal securities laws and further charges Middlebrooks with aiding and abetting EIA’s violations of the Investment Advisers Act of 1940.
The agency is seeking injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties against EIA and Middlebrooks. The SEC also named as relief defendants EIA All Weather Alpha Fund I LP; EIA All Weather Alpha Fund Partners II LLC; and Shop Style Shark LLC, Middlebrook’s wife’s business.
The SEC’s investigation is continuing, the agency said.