SEC Charges Investment Advisory Firm GlennCap With Cherry-Picking Fraud

The Securities and Exchange Commission (SEC) announced settled fraud charges against GlennCap LLC, a Connecticut-based investment advisory firm, and its owner, Jonathan Vincent Glenn. The SEC found that between January 2020 and March 2022, Glenn had allocated profitable securities trades to favored accounts, including his own accounts as well as those of clients paying him a higher percentage in returns, while giving a disproportionately greater number of unprofitable trades to other disfavored clients, a practice referred to as "cherry-picking". Through their fraudulent practices, Glenn and his firm reaped a profit of at least $2.7 million. Furthermore, the SEC found that Glenn had made multiple false and misleading statements to clients and potential clients regarding trading practices. The SEC charged Glenn and GlennCap with violating various sections of the Exchange Act of 1934, the Securities Act of 1933, and the Investment Advisers Act of 1940. As a result, Glenn and GlennCap agreed to pay civil penalties of over $3 million, involving disgorgement and prejudgment interest. The investigation was conducted by the SEC's Asset Management Unit and Boston Regional Office, with the aid of the Division of Economic and Risk Analysis, and was supervised by Robert Baker and Andrew Dean. The SEC also thanked the Connecticut Department of Banking's Securities and Business Investments Division for their help.