The SEC brought an enforcement action against Laurence I. Balter, who resides in Kihei, Hawaii, and doing business as Oracle Investment Research, for “cherry-picking” profitable trades for his own account rather than a client’s accounts. The SEC further found that Balter misled seniors and other clients about the fees he charged and the risks in investments he recommended.
The SEC alleged that Balter and his firm Oracle Investment Research purchased equities and options in an omnibus account and waited to allocate the trades until after they were executed while Balter knew whether they were profitable. Balter allegedly allocated profitable trades to his own accounts and unprofitable trades to his client accounts.
The SEC further states that Balter falsely told clients invested in his affiliated mutual fund they would not pay both advisory fees and fund management fees, yet he charged both fees anyway. Balter also allegedly made trades for the mutual fund that deviated from two of its fundamental investment limitations and ultimately resulted in a non-diversified portfolio that caused significant losses to investors.
Click Laurence I. Balter, Investment Advisers Act Rel. No. 4545 (October 4, 2016) to access the enforcement action.