Advisor Stole Profits! Cherry-Picked Trades for Wife, Clients Got Scraps!

SEC v. Eric Cobb — U.S. Securities and Exchange Commission Litigation Release No. 26342, dated July 9, 2025.

The SEC charged Eric Cobb, a former investment adviser representative, with a "cherry-picking" scheme. Cobb allegedly allocated profitable trades to his own accounts and unprofitable ones to clients. He has consented to a final judgment that bars him from the industry and requires him to pay over $160,000.

In Plain English

Imagine you're buying a bunch of cookies. You decide which cookies go to your friends and which ones you keep. If some cookies are super popular and sell for more later, you'd want to give those to yourself, right? And if some cookies don't sell well, you'd give those to your friends. That's kind of what Eric Cobb is accused of doing with investments. He allegedly gave his clients the bad deals and kept the good ones for himself.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Buy Securities Eric Cobb would buy a batch of securities in a single account that held investments for multiple people, including himself and his clients. This happened from at least June 2019 to mid-April 2022.
2. Wait and See After buying the securities, Cobb would often wait a day or more before deciding which client's account would officially receive which specific shares. This delay allowed him to see how the stock price was moving.
3. Allocate Profitable Trades If the securities increased in price during the waiting period, Cobb would then allocate those profitable trades to his personal account or his wife's account.
4. Allocate Unprofitable Trades Conversely, if the securities lost value or performed poorly, Cobb would allocate those losing trades to the accounts of certain clients.
5. Misalign Investments In addition to cherry-picking trades, Cobb also allegedly placed clients into investments that were very risky and volatile, even though these investments did not match the clients' stated financial goals or risk tolerance.

The Enforcement Action

SEC Obtains Final Judgment Against Former Investment Adviser Representative in Cherry-Picking Scheme. On July 2, 2025, the U.S. District Court for the Southern District of New York entered a final judgment against Eric Cobb, a former South Carolina-based investment adviser representative. The judgment enjoins Cobb from violating certain provisions of the federal securities laws and orders Cobb to pay more than $160,000. Cobb, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of the judgment that enjoins him from violating the antifraud provisions of the federal securities laws, imposes a bar from associating with any broker, dealer, or investment adviser, orders disgorgement of $114,093 plus prejudgment interest thereon of $22,293.33, and orders a civil monetary penalty of $25,000.

Named in this action: Eric Cobb.

Original SEC litigation release ↗ · Browse all cases