The Securities and Exchange Commission has settled charges against Robert Magee, an Austin, Texas-based investment adviser, for allegedly engaging in a fraudulent cherry-picking scheme and violating antifraud provisions of the federal securities laws.
Magee is the principal, sole owner and sole employee of Valor Capital Asset Management LLC.
For nearly three years, Magee traded securities in Valor Capital's omnibus account, but he waited to allocate the trades to client accounts until after the securities' performance changed over the course of the day, the regulator alleged. He then allegedly allocated profitable trades to his own accounts and shifted the unprofitable trades to his clients' accounts to reap profits for himself.
Without admitting or denying the SEC's findings, Magee and Valor agreed to the entry of a cease-and-desist order and to pay $715,871.57 in disgorgement, prejudgment interest, and civil penalties. Magee has also agreed to be banned from the securities industry.
