March 8, 2018

The SEC announced settled charges against Austin, Texas-based investment adviser Robert Mark Magee, the owner of Valor Capital Asset Management LLC for defrauding his clients through a “cherry-picking” scheme.  The adviser, Magee, has agreed to be banned from the securities industry and pay more than $715,000 to resolve the charges. According to the SEC’s order, for almost three years, Magee traded securities in Valor’s omnibus account but waited to allocate the trades to client accounts until after the securities’ performance changed over the course of the day.  Magee then “cherry-picked” the trades, disproportionately allocating profitable trades to his accounts and unprofitable trades to his clients’ accounts, reaping substantial profits for himself at his clients’ expense. The SEC’s order found that for most of the three-year period there was less than a one-in-a-trillion chance that the outsized performance of Magee’s personal account, compared to that of his clients’ accounts, was due to chance. SEC

Tagged in: Regulatory Violations, Securities Fraud,