Complinet logo
Contact us

SEC shuts adviser, bars compliance chief after Schwab warns of cherry-picking scheme

Jan 18 2013 Stuart Gittleman, Compliance Complete

The Securities and Exchange Commission on Wednesday barred the owner and chief compliance officer of an investment adviser whose employees were warned by Charles Schwab & Company that the executive was defrauding the adviser's clients. Schwab was the custodian for the client accounts of the adviser, Centerbrook, Connecticut-based MiddleCove Capital, LLC, which used an omnibus account for its trading, the SEC order sanctioning the firm and Noah Myers, its owner and CCO, said. Effective systems and employees who push back and threaten to make a regulatory report can stop fraudsters in their tracks. Without admitting or denying the SEC's findings, MiddleCove Capital consented to having its registration as an adviser revoked and Myers agreed to be barred from the advisory, securities, fund company and penny stock industries. MiddleCove and Myers agreed to be jointly and severally liable for paying $462,022 in disgorgement, $26,096 in prejudgment interest and a $300,000 fine. They

Already have an account?

Log in

Want to read this article?

Click here for a free 14 day trial