Connecticut investment advisor Noah Myers was sentenced to 40 months in prison on Monday by a District Court for defrauding investment clients in a "cherry-picking" securities scheme.
Myers, who is the owner of MiddleCove Capital LLC, plead guilty in October to one count of security fraud. The government said the scheme cost investors about $470,000.
Myers' defense attorney was not immediately available for comment but in court documents asked for a more lenient sentence, citing his 43-year-old client's attempts to make restitution. The government had sought 37 to 46 months in prison.
A cherry-picking trader allocates the profitable trades to favored accounts, often the individual's own account, and assigns unprofitable trades to disfavored accounts, said Deirdre Daly, U.S. Attorney for the District of Connecticut.
Between April 2009 and November 2010, Myers engaged in the fraudulent practise at MiddleCove by purchasing the leveraged exchange traded fund (ETF) ProShares UltraShort Financials, as well as other securities, according to court documents filed by Assistant U.S. Attorney Christopher Schmeisser.
Myers then disproportionately allocated trades that had appreciated in value during the course of the day to his personal and business accounts, the documents said.
The Securities and Exchange Commission in 2013 revoked the registration of MiddleCove as an investment adviser and barred Myers from the securities industry.
