SEC files charges against “cherry-picking” scheme led by Ramiro Sugranes
The preferred client accounts, believed to be held by his relatives, received approximately $4.6 million from profitable trades while other clients sustained more than $5 million in first-day losses.
The Securities and Exchange Commission has obtained an asset freeze and filed fraud charges against Ramiro Jose Sugranes, a Miami-based investment professional, and two investment firms.
The financial watchdog alleges the defendants were engaging in a “cherry-picking” scheme in which they channeled millions of dollars in trading profits to preferred accounts.
Since September 2015, and through UCB Financial Advisers Inc. and UCB Financial Services Limited, Mr. Sugranes has allegedly diverted profitable trades to two accounts believed to be held by his relatives and saddle other clients with losing trades.
Mr. Sugranes allegedly used a single account to place trades without specifying the intended recipients of the securities at the time he placed the trades.
If the price of the securities increased during the trading day, the defendants usually closed out the position and allocated those profitable trades to the two preferred accounts. Otherwise, the unprofitable trades would be allocated to other client accounts.
The preferred clients received approximately $4.6 million from profitable trades while other clients sustained more than $5 million in first-day losses.
Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit, said: “We allege that Sugranes used the UCB investment firms to funnel millions of dollars to two clients, while unloading over $5 million in first-day losses on their other clients. The SEC uses sophisticated analytical tools to ferret out investment professionals who abuse their positions to engage in cherry-picking and other fraudulent conduct, as we allege happened here.”
The court granted the SEC’s request for emergency relief, including an asset freeze, accounting, and expedited discovery.