SEC-PR-2412-198

According to the SEC’s complaint against Cobb, from at least June 2019 to mid-April 2022, Cobb allegedly disproportionately allocated profitable trades to his personal and wife’s accounts, and unprofitable trades to the accounts of his other clients. Cobb allegedly executed the scheme by buying securities in an omnibus account and then often waiting a day or longer to allocate the trades, which allowed him to see whether the securities had increased in price. The SEC’s complaint also alleges that Cobb routinely placed clients in highly volatile and risky investments that were inconsistent with their investment profiles.

The SEC’s order regarding New York-based SeaCrest, which oversees representatives located in more than two dozen offices around the country, found that the firm failed to implement policies and procedures reasonably designed to prevent violations of the federal securities laws and failed to supervise Cobb’s activities.

“We will use all the tools at our disposal to hold individuals accountable, including asking Courts to enforce our subpoenas, as we did in this case,” said Sheldon L. Pollock, Associate Regional Director in the New York Regional Office. “The enforcement action against SeaCrest demonstrates the importance of decentralized firms having robust compliance oversight with regard to employees who may be located elsewhere.”