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SEC Bars BKS Advisors' Roger Denha for Fraudulent Cherry-Picking Trade Allocation Scheme

The SEC barred Brandt, Kelly & Simmons Securities broker and BKS Advisors investment adviser Roger Thomas Denha for engaging in a fraudulent trade allocation scheme known as "cherry picking," wherein Denha disproportionately allocated profitable trades between favored accounts while simultaneously allocating unprofitable trades to accounts held by certain other clients.

Investigators found that the difference in returns between the favored and disfavored accounts was significant: the favored accounts averaged +1.01% while the disfavored accounts averaged -0.16%.

According to the SEC's cease-and-desist order, Denha of Beverly Hills, Michigan (CRD #2468173), from 2012-2017 executed trades in an omnibus account that BKS had set up for Denha's block trading activity, sometimes allocating shares later in the day after he placed a trade, opting to allocate the shares in a way that disproportionately favored certain accounts while harming other accounts.

For instance, investigators found that Denha obtained at least $412,230 in gains as a result of the cherry-picking scheme, ordering him to pay disgorgment in that amount, plus interest, to the SEC, fining him an additional $169,000.

Earlier this year, the SEC charged Joseph Brian Bronson, owner of Strong Investment Management in Yorba Linda, with defrauding customers through a cherry-picking scheme, furthered by the firm's chief compliance officer, John B Engebretson of Anaheim Hills, who allegedly shared in Bronson's fraud and profited at the expense of firm clients.

In late 2017, the SEC similarly barred Jeremy A Licht of Sherman Oaks for cherry-picking day trades from an omnibus account held at his California-based firm, JL Capital Management.

If you have invested with Roger Thomas Denha or with any broker or financial adviser who has engaged in cherry-picking trade allocation fraud or whose violative trading practices or recommendations have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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The Law Offices of Jonathan W. Evans & Associates - California Securities Fraud Attorney
Located at 12711 Ventura Boulevard, Suite #440 Studio City, CA 91604. View Map
Phone: (800) 699-1881 | Local Phone: (818) 760-9880.
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