Former Investment Advisor Pleads Guilty to $2.7 Million Fraud

A former registered investment advisor, Jonathan Vincent Glenn, has pleaded guilty to defrauding clients of $2.7 million in a cherry-picking scheme. This misconduct could result in a lengthy prison term.

SEC Bars Glenn for Favoritism Allegations

Last month, the Securities and Exchange Commission (SEC) barred Jonathan Vincent Glenn, from Greenwich, Conn., from the industry due to allegations of playing favorites with his clients. It was found that he allocated profitable trades to preferred accounts, while directing money-losing trades to others.

Glenn settled the civil charges without admitting or denying misconduct. However, in the criminal case, he acknowledged his role in the scheme and pleaded guilty to charges that carry a penalty of up to 25 years in prison. Prosecutors have indicated that they might recommend a reduced sentence as per the plea agreement.

Glenn’s attorney has not responded to a request for comment on the matter. The sentencing has been scheduled for Dec. 28.

GlennCap's Trading Scheme

Between 2020 and early 2022, Jonathan Vincent Glenn executed a series of trades through an omnibus account while working at RIA GlennCap. He then allocated profits or losses to individual clients. However, instead of informing his clients about this "cherry-picking" strategy, Glenn falsely represented that trades were allocated fairly according to a predetermined methodology.

According to the Department of Justice, more than 45 clients were defrauded through this trading scheme.

Consequences and Settlement

In the civil settlement reached last month, the SEC barred Glenn from associating with any RIA or broker-dealer. Additionally, he was ordered to pay nearly $3.5 million in disgorgement, penalties, and interest.

In addition to the potential prison sentence, the Justice Department has noted that Glenn could face a fine of up to $5.4 million.