UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Plaintiff Securities and Exchange Commission ("Commission"), for its Complaint against Eric McKenzie Cobb ("Cobb"), alleges that Cobb, a former investment adviser representative, engaged in a long-running and fraudulent trade allocation scheme, commonly referred to as "cherry-picking"-from at least approximately January 2019, and continuing to at least mid-April 2022 (the "Relevant Period") in which he benefitted himself to the tune of approximately $170,000 in net illicit profits while betraying his fiduciary obligations to his advisory clients, and causing them approximately $188,000 in aggregate losses. To carry out this scheme, Cobb engaged in frequent "block trading"-placing securities trade orders in one aggregated account, rather than directly in specific client accounts and then waited at least one day after the trades were executed before allocating them between his client accounts on the one hand, and accounts held by him and his wife on the other hand. By waiting to allocate, Cobb could see whether the price of the securities he traded rose or fell after the trades were executed before deciding whether he would assign them to his accounts or to his clients' accounts. Cobb then disproportionately assigned the profitable trades to his account, and disproportionately allocated unprofitable trades to his clients' accounts. Cobb chose to concentrate his trading for his and his clients' accounts in securities that maximized his opportunity to profit from his cherry-picking scheme: Risky, volatile securities such as leveraged exchange-traded funds ("Leveraged ETFs") that sought to amplify the returns on underlying indices, as well as volatile, non-leveraged ETFs and other securities based on volatile commodities, such as precious metals and mining. For example, the Leveraged ETFs frequently had rapid and large price movements within a trading day, or from one trading day to the next. By concentrating his trading strategy on those investments, Cobb was able to grab quick profits from large price movements (or avoid large losses) in these securities by waiting a day to allocate them. But this speculative investment strategy was unsuitable and against the best interests of certain of his clients, whose financial profile, investment objectives and risk tolerance, as Cobb knew or recklessly or unreasonably disregarded, called for a far more conservative investment strategy. As described in the complaint, these clients lost substantial amounts of the funds they had entrusted to Cobb during the Relevant Period.

Compromise

Satisfied/Released

RAYMOND JAMES FINANCIAL SERVICES

Discharged

Financial Advisor terminated for violation of firm policy and FINRA rules related to communications with the public. Financial Advisor had been issued a Letter of Caution by FINRA for the same rules violations at his prior firm.

RAYMOND JAMES FINANCIAL SERVICES ADVISORS

Discharged

Financial Advisor terminated for violation of firm policy and FINRA rules related to communications with the public. Financial Advisor had been issued a Letter of Caution by FINRA for the same rules violations at his prior firm.

CLIENT CLAIMS FINANCIAL ADVISOR ALLEGEDLY FAILED TO EXPLAIN RISKS REGARDING AN EXCHANGE TRADED FUND PURCHASED IN MARCH 2009. CLIENT ALSO ALLEGES AN ETF WAS PURCHASED IN CERTAIN OF THE ACCOUNTS AT ISSUE WITHOUT AUTHORIZATION.

CLIENT ALLEGES THAT THE RATE OF RETURN ON HIS VARIABLE ANNUITY CONTRACT WAS MISREPRESENTED. CLIENT WANTS TO SURRENDER HIS CONTRACT AND REQUESTS REIMBURSEMENT OF THE SURRENDER CHARGES.

$17,746.00

INSURANCE CARRIER NOTED THAT THE INTEREST RATE WAS NOT CORRECT AND MADE THE CORRECTION TO THE GMIB BENEFIT. THIS RESULTED IN A CORRECTION AND, THUS, A CREDIT OF $5575.00 TO THE GMIB BENEFIT BASE.