SEC Uses Data Analysis to Detect Cherry-Picking By Broker Michael A. Bressman Alternative Reporting, Alternative Reporting Requirements, Direct Public Offering, Direct Public Offering Attorney, Direct Public Offering Attorneys, Direct Public Offering Lawyer, Exchange Act, Form 1-A, Form 1-K, Form 1-SA, Form 1-Z, Form 211, Form S-1, Form S-1 Attorney, Form S-1 Lawyer, Form SEC, Go Public Direct, Going Public Attorney, Going Public Attorneys, Going Public Lawyer, Going Public Lawyers, Market Maker, OTC Markets, OTC Markets Alternative Reporting, OTC Markets and Sponsoring Market Maker, OTC Markets Attorney, OTC Markets Group, OTC Markets Lawyer, OTC Markets Link, OTC Markets Market Maker, OTC Markets OTC Pink, OTC Markets OTCAX, OTC Markets OTCQB, OTC Markets OTCQX, OTC Markets Sponsoring Market Maker, OTC Pink, OTC Pink Market, OTCQB, OTCQB lawyer, OTCQX, Registered Direct Public Offering, Registration Statement, Regulation A, Regulation A Qualification, Regulation A Reporting, Rule 15c2-11, SEC Effectiveness, SEC Qualification, SEC Reporting, SEC Reporting Obligations, SEC Reporting Requirements, Securities Act
The Securities and Exchange Commission charged a New Jersey-based broker with misusing his access to customers’ brokerage accounts to enrich himself and family members at the expense of his customers, many of whom had entrusted him with their retirement accounts. The SEC uncovered the alleged fraud with data analysis used to detect suspicious trading patterns.
The SEC filed fraud charges in federal district court against Michael A. Bressman of Montville, New Jersey, alleging that he misused his access to an omnibus or “allocation” account to obtain at least $700,000 in illicit trading profits over a six-year period ending in February. The SEC’s complaint alleges that Bressman placed trades using the allocation account and cherry-picked profitable trades, which he then transferred to his own account and the account of two family members, while placing unprofitable trades in other customers’ accounts.
In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts today announced criminal charges against Bressman.
“SEC data analysis played an important role in identifying the alleged securities law violations,” said Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit. “We will continue to develop and use data analytics to root out cherry-picking and other frauds.”
The SEC’s complaint, filed in federal court in Massachusetts, charges Bressman with violating antifraud provisions of the federal securities laws and a related SEC antifraud rule. The SEC is seeking return of allegedly ill-gotten gains, plus interest, penalties and a permanent injunction.
The SEC’s investigation was conducted by Vanessa De Simone and Charles Riely of the Market Abuse Unit in the New York Regional Office with assistance from Jonathan Hershaff and Mark Kaplan in the Division of Economic and Risk Analysis and Hugh Beck in the Market Abuse Unit. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts and the Boston field office of the Federal Bureau of Investigation.
https://www.sec.gov/news/press-release/2018-189
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