On September 12, 2017, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the "Order") against Jeremy A. Licht d/b/a JL Capital Management (the "Respondent"). In the Order, the Commission found that, from at least January 2011 through November 2015, the Respondent, a California registered investment adviser, engaged in a fraudulent trade allocation scheme, or "cherry-picking," that harmed his advisory clients. The Respondent allocated a disproportionate number of favorable trades (i.e., trades that had a positive first-day return) to his own account and allocated a disproportionate number of unfavorable trades (i.e., trades that had a negative first-day return) to clients' accounts. As a result of his scheme, the Respondent realized at least $88,504.00 in ill-gotten gains. The Commission ordered the Respondent to pay a total of $278,289.34 in disgorgement, prejudgment interest, and civil money penalty to the Commission, pursuant to a 12 month payment plan. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalty, along with the disgorgement and interest, collected can be distributed to investors harmed by the Respondent's conduct.  See the Commission's Order: Release No. 34-81584.

On April 19, 2018, the Commission issued an order appointing Miller Kaplan Arase LLP as the Tax Administrator of the Fair Fund. 

On August 22, 2019, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The Proposed Plan proposes Noel Gittens, a Commission employee, serve as the Fund Administrator to oversee the administration and distribution of the Fair Fund. The notice provides the public with 30 days to submit their comments on the Proposed Plan.  See the Commission’s Notice:  Release No. 34-86733 and Proposed Plan. 

The Proposed Plan proposes to make distributions from the Net Fair Fund to investors who were harmed as a result of Licht’s fraudulent allocation or “cherry-picking” scheme and who suffered losses as calculated by the methodology described in paragraph 11 of the Proposed Plan.

On October 10, 2019, the Commission issued an order approving the plan of distribution and published the approved plan of distribution (the "Plan").  See the Commission's Order: Release No. 34-87283 and the Plan.

On June 5, 2020, the Commission issued an order directing the disbursement of $101,791.46 from the Fair Fund for distribution to harmed investors in accordance with the Plan. See the Commission’s Order: Release No. 34-89025. 

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov