The SEC has filed a complaint against Brian Hobbs for a fraudulent “cherry-picking” scheme, executed through his advisory firm, TH Wealth Management. Brian Hobbs is the sole owner and principal of the Texas firm, and the only person in a position to allocate trades to investors. Investors who worked with TH Wealth Management should examine their investments – according to the SEC, Hobbs has kept the most profitable trades for himself. The regulator alleges that his scheme has resulted in a total loss of $275,000 for investors.
How Does Cherry Picking Happen?
When an investor cherry-picks securities, they monitor how securities perform throughout the day, and then allot the best trades to their own personal accounts. Alternatively, they might place the winning trades in a client’s account to make up for losses. The SEC alleges that the chances that TH Wealth Management’s trades happened naturally are less than one in a million.
Brian Hobbs allegedly executed his cherry-picking scheme using an omnibus account, a type of account that investors use to manage multiple client accounts. These types of accounts allow the broker to decide which trade goes to which account, after observing how the security performs throughout the day. As a registered investment adviser, Brian Hobbs is required to fulfill his duties as a fiduciary, which require that he should only ever act in his client’s best interest.
TH Wealth Management Brochures
Investors who worked with TH Wealth Management may have read the firm’s brochures, which specifically state that the firm will allocate trades fairly. The SEC included the following excerpt from a TH Wealth Management brochure in their complaint: “In any given situation, we attempt to allocate trade executions in the most equitable manner possible, taking into consideration client objectives, current asset allocation and availability of funds using price averaging, proration and consistently non-arbitrary methods of allocation.”
The SEC has ordered that Brian Hobbs and TH Wealth Management return their ill-gotten gains to the defrauded customers. They are also seeking to impose civil fines.
Did You Work with Brian Hobbs? Here’s What You Should Know.
Investors should know that as of publication, Brian Hobbs has two disclosures on his IAPD record. They reveal investor allegations of unauthorized trades and forgery and were collectively resolved for a total of $156,000. These customer complaints occurred while Hobbs was registered with Andrew Garrett, Inc.
Cherry picking is not easy to detect. Investors rely on the SEC and trading platforms to notice that something does not add up. If you worked with Brian Hobbs or TH Wealth Management in the past, you should contact the securities attorneys at Fitapelli Kurta for a free case evaluation. Call (877) 238-4175 or email email@example.com.