Eric McKenzie Cobb

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26201 / December 20, 2024

Securities and Exchange Commission v. Eric McKenzie Cobb, No. 1:24-cv-09494-PKC (S.D.N.Y. filed Dec. 12, 2024)

SEC Charges Former Representative of Advisory Firm SeaCrest with Cherry-Picking

The Securities and Exchange Commission today announced it charged Eric Cobb of South Carolina with engaging in a fraudulent scheme where he allocated profitable securities trades to favored accounts and unprofitable trades to disfavored clients, a practice known as cherry-picking, while he was a representative of investment adviser SeaCrest Wealth Management, Inc.

According to the SEC’s complaint against Cobb, from at least June 2019 to mid-April 2022, Cobb allegedly disproportionately allocated profitable trades to his personal and wife’s accounts, and unprofitable trades to the accounts of his other clients. Cobb allegedly executed the scheme by buying securities in an omnibus account and then often waiting a day or longer to allocate the trades, which allowed him to see whether the securities had increased in price. The SEC’s complaint also alleges that Cobb routinely placed clients in highly volatile and risky investments that were inconsistent with their investment profiles.  
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, charges with violating the antifraud provisions of Section 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

The SEC’s investigation was conducted by Bennett Ellenbogen, James Flynn, Richard Primoff, and Lindsay S. Moilanen of the New York Regional Office and was supervised by Sheldon L. Pollock. The SEC’s litigation will be led by Mr. Ellenbogen and Mr. Primoff and supervised by Alex Vasilescu. The SEC appreciates the assistance of SEC Division of Examinations staff, Arjuman Sultana, Michael Qualter, Emanuel Asmar, and Merryl Hoffman; and SEC Division of Economics and Risk Analysis staff, Kathryn Paige and Tyler Remick.