Eric Cobb
U.S. Securities and Exchange Commission
Litigation Release No. 26342 / July 9, 2025
Securities and Exchange Commission v. Cobb, Civil Action No. 1:24-cv-09494 (S.D.N.Y. filed Dec. 12, 2024)
SEC Obtains Final Judgment Against Former Investment Adviser Representative in Cherry-Picking Scheme
On July 2, 2025, the U.S. District Court for the Southern District of New York entered a final judgment against Eric Cobb, a former South Carolina-based investment adviser representative, who the SEC alleged engaged in a long-running fraudulent trade allocation scheme, commonly referred to as “cherry-picking.” The judgment enjoins Cobb from violating certain provisions of the federal securities laws and orders Cobb to pay more than $160,000.
According to the SEC’s complaint, from at least June 2019 to mid-April 2022, Cobb disproportionately allocated profitable trades to his personal and wife’s accounts, and unprofitable trades to certain client accounts. 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 alleged that Cobb routinely placed clients in highly volatile and risky investments that were inconsistent with their investment profiles.
Cobb, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of the judgment that enjoins him from violating the antifraud provisions of the federal securities laws, imposes a bar from associating with any broker, dealer, or investment adviser, orders disgorgement of $114,093 plus prejudgment interest thereon of $22,293.33, and orders a civil monetary penalty of $25,000.
The SEC’s investigation was conducted by Bennett Ellenbogen, James Flynn, Richard Primoff, and Lindsay S. Moilanen and was supervised by Sheldon L. Pollock, all of the SEC’s New York Regional Office. The litigation was led by Mr. Ellenbogen and Mr. Primoff and supervised by Alex Vasilescu.