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SEC Charges New Jersey Broker With Cherry-Picking

By Alex Padalka September 14, 2018

The SEC has charged a New Jersey-based broker with fraudulently making at least $700,000 by cherry-picking trades at the expense of his clients, according to a press release from the regulator.

Over a six-year period ending in February, Michael Bressman allegedly misused his access to an “allocation” account to place trades, transferring the profitable ones to his own account and the accounts of two family members, according to the SEC, which filed charges in federal court in Massachusetts.

Bressman then put the unprofitable trades in his other clients’ accounts, many of which were retirement accounts, the regulator says. The SEC has charged Bressman with violating both federal and SEC antifraud provisions and is seeking the return of the allegedly ill-gotten gains with interest, penalties and a permanent injunction, according to the SEC’s press release.

The regulator was able to uncover Bressman’s alleged fraud using data analysis designed to detect suspicious patterns of trading, the SEC says.

“We will continue to develop and use data analytics to root out cherry-picking and other frauds,” Joseph Sansone, chief of the SEC enforcement division’s market abuse unit, says in the press release.

Bressman is also facing criminal charges filed in a parallel action by the U.S. Attorney’s Office for the District of Massachusetts, according to the press release.

Bressman had joined the securities industry in 1979 and worked at Merrill Lynch for 20 years before joining FCG Advisors in 2000, according to his BrokerCheck profile.

(Getty)

FCG discharged him this May following allegations “made that accused him of, among other things, misusing the Firm’s allocation account in connection with his personal trades,” according to his profile. Bressman has nine disclosure events on his record, starting with a customer dispute dating back to 1987, settled by Merrill Lynch with a contribution from Bressman, alleging unauthorized discretion in several accounts, according to BrokerCheck.