The Securities and Exchange Commission (SEC) has obtained an asset freeze and other emergency relief, and filed fraud charges, against Ramiro Jose Sugranes, UCB Financial Advisers Inc., and UCB Financial Services Limited for their involvement in an alleged “cherry-picking” scheme.
According to the SEC, Sugranes, a Miami-based investment professional, channeled millions of dollars in trading profits to two accounts believed supposedly held by Sugranes’ relatives, leaving other clients with losses. The defendants allegedly used a single account to place trades without specifying the intended recipients of the securities at the time they placed the trades.
If the securities price increased, the defendants often closed the position and funneled them to the priority accounts. If they fell, they saddled others. The lucky clients received roughly $4.6 million while the others lost more than $5 million
“We allege 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,” said Joseph G. Sansone, chief of the SEC Enforcement Division’s Market Abuse Unit. “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 three defendants were charged with violating the antifraud provisions of the federal securities laws, and the SEC seeks permanent injunctions, disgorgement, prejudgment interest, and civil penalties. The complaint also names the preferred clients as relief defendants and seeks to recover their unlawful gains and prejudgment interest. On June 14, the court granted the SEC’s request for emergency relief, including an asset freeze, accounting, and expedited discovery.
The SEC’s investigation, which is ongoing, stems from the Market Abuse Unit’s Analysis and Detection Center, which uses data analysis tools to detect suspicious patterns, including improbably successful trading.