A U.S. District Court judge has ordered a Massachusetts advisor who was sued by the SEC for orchestrating a cherry-picking scheme to pay $1.33 million. 

The judgment comes three months after Michael J. Breton, 50, of Waltham, Mass., pleaded guilty to criminal charges connected to the scheme and was sentenced to two years in prison, two years of supervised release, and ordered to forfeit $1,326,696 and to pay restitution in the same amount.

The SEC sued Breton and his firm, Strategic Capital Management LLC, in 2017 with fraud for engaging in a cherry-picking scheme whereby he placed trades through a master brokerage account and then allocated profitable trades to himself and unprofitable trades to clients accounts. He made more than $1.3 million, the SEC said.

The SEC complaint said Breton often purchase securities of public companies through a block trading omnibus account during regular market hours on days that those public companies were scheduled to make quarterly and/or annual earnings announcements after regular market hours.

He would wait to decide whether to allocate the trades to his own accounts or the client accounts until after the public companies made their earnings announcements, the complaint said. This delay enabled Breton to assess whether the earnings news caused or would likely cause an increase or a decrease to the share price of the purchased securities.

Breton and his firm used the information to defraud at least 30 of SCM’s clients by cherry-picking more than 200 profitable trades and allocating more than 200 unprofitable trades to the client accounts, the complaint said. The scheme took place over a six-year period, the complaint noted.

In the final judgment in the SEC's case, Breton's payment obligation is deemed satisfied by entry of the restitution order entered against him in the parallel criminal case, the SEC said.