{"id":18230,"date":"2019-09-02T11:46:40","date_gmt":"2019-09-02T16:46:40","guid":{"rendered":"https:\/\/www.investorlawyers.com\/blog\/?p=18230"},"modified":"2019-09-06T11:54:09","modified_gmt":"2019-09-06T16:54:09","slug":"financial-sherpa-accused-of-cherry-picking","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/financial-sherpa-accused-of-cherry-picking\/","title":{"rendered":"Financial Sherpa Accused of Cherry Picking"},"content":{"rendered":"

In a settlement reached with the US Securities and Exchange Commission (SEC)<\/a>, Financial Sherpa and its principal James L. Beyersdorf will pay more than $232K of disgorgement, over $15K of prejudgment interest, and a $188K penalty for allegedly defrauding investment advisory clients<\/a> by engaging in a cherry picking scam. The regulator contends that Beyersdorf allocated a disproportionate amount of option trades that were profitable to himself and his wife while distributing the unprofitable ones to the firm and his clients. Beyersdorf oversaw some $6.7M in assets for 13 individual investors.<\/p>\n

According to the SEC, he purchased options in the firm\u2019s omnibus trading account during the morning, distributing the trades later in the day. The regulator claims that because of the allegedly illegal trading, over six months– from October 2017 and April 2018– Beyersdorf and his wife ended up with a net positive one-day return of more than 45% on the options trades that were sent to their accounts. Meantime, the negative one-day return for the firm\u2019s individual clients that received the unprofitable trades was also 45%. The Commission said that the odds of the \u201cdisparate performance\u201d occurring by chance was under one-in-a million.<\/p>\n

Also, while the registered investment advisory\u2019s strategy for the majority of its clients involved placing about 90% of each of their assets in exchange-traded funds (ETFs) and 10% in short term options trading, the account of Beyersdorf’s wife traded nearly exclusively in options and did not hold any ETF positions.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

In a settlement reached with the US Securities and Exchange Commission (SEC), Financial Sherpa and its principal James L. Beyersdorf will pay more than $232K of disgorgement, over $15K of prejudgment interest, and a $188K penalty for allegedly defrauding investment advisory clients by engaging in a cherry picking scam. The regulator contends that Beyersdorf allocated […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[4023,3781,3738],"tags":[4165,4166],"class_list":["post-18230","post","type-post","status-publish","format-standard","hentry","category-exchange-traded-funds","category-investment-advisers","category-investor-fraud","tag-financial-sherpa","tag-james-l-beyersdorf"],"yoast_head":"\nFinancial Sherpa Accused of Cherry Picking — Investor Lawyers Blog — September 2, 2019<\/title>\n<meta name=\"description\" content=\"Financial Sherpa and its principal James L. 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