The U.S. Securities and Exchange Commission (SEC) issued a settlement order last week in the case of an Oracle Investment Research executive who was charged with misleading clients.
The Hawaii-based investment adviser, Laurence I. Balter, will pay over $550,000 to end the SEC case. The securities regulator claimed that Balter defrauded his clients by cherry-picking profitable trades for himself, misrepresenting his management fees, and straying from his fund’s investment policies.
Under the settlement terms, Laurence I. Balter of Oracle Investment Research will pay the SEC almost $490,000 in disgorgement along with a $50,000 civil penalty and more than $10,000 in interest.
Oracle Investment Research Exec Mislead Clients
The Oracle Investment Research case of Laurence I. Balter dates back to October of 2016 when the SEC first announced fraud charges against the investment adviser. The charges accused him of “cherry-picking” profitable trades for his own account rather than a client’s accounts, while also misleading clients about fees and investments risks.
Jina L. Choi, Director of the SEC’s San Francisco Regional Office stated at the time of the announcement of the charges in October, “We allege that Balter reaped more than a half-million dollars in ill-gotten gains by siphoning winning trades from his clients and withdrawing more than his fair share of management fees.”
Balter, through his firm Oracle Investment Research, purchased equities and options in an omnibus account, then waited to allocate the trades until after they were executed. By doing so, Balter knew which trades were profitable. He then allocated profitable trades to his own accounts and unprofitable trades to his client accounts.
In addition to this, Balter lied to clients regarding fees charged. The SEC alleges that despite telling clients that they would not pay advisory fees and fund management fees, Balter charged the clients for the fees anyway.
He also allegedly made trades that deviated from several fundamental investment limitations, ultimately resulting in a non-diversified portfolio that resulted in significant investor losses.
Did You Invest with Oracle Investment Research?
If you invested with Laurence I. Balter and/or his Hawaii-based firm Oracle Investment Research, and believe that you have been the victim of fraud, contact a qualified securities fraud attorney today.
Call an Investment Fraud Attorney Today
If you are looking for an attorney to review your rights and options, the lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerages firms for their wrongful actions.