Michael Breton & Strategic Capital Management—Cherry-Picking Scheme

Cleveland stockbroker fraud lawyerMichael J. Breton & Strategic Capital Management Allegedly Orchestrated a Cherry-Picking Scheme via Data Analysis Implemented to Detect Suspicious Trading Patterns which Purportedly Defrauded Investors out of $1.3 Million

Michael Breton and his Strategic Capital Management allegedly orchestrated a so-called cherry-picking scheme via data analysis implemented to detect suspicious trading patterns, according to recent SEC Documents currently under review by attorneys Alan Rosca and James Booker.

Michael Breton, a Massachusetts-based investment adviser, and his Strategic Capital Management allegedly defrauded clients out of approximately $1.3 million, according to said SEC Documents.

Breton allegedly executed trades via a master brokerage account before allocating profitable trades to himself before purportedly putting unprofitable trades into client accounts, the SEC reports.

Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit, made the following statement:

“As alleged in our complaint, Breton assured clients that he would put their interests first but did just the opposite, taking the firm’s most profitable trades for himself and dumping the losing trades on his clients. Our probing analytical work will continue to root out investment advisers who subject their clients to cherry-picking.”

The Peiffer Rosca Wolf securities lawyers are currently investigating Michael Breton’s alleged cherry-picking scheme.

Breton Allegedly Defrauded at Least 30 Clients over a Six-year Period; Breton Barred from the Securities Industry by the SEC

Breton allegedly defrauded at least 30 clients during a six-year stint as detailed by SEC Market Abuse Unit analysis, according to an SEC Complaint presently being examined by attorneys Alan Rosca and James Booker.

Breton allegedly purchased securities for his own accounts and the client accounts through a block trading or master account on days when public companies scheduled earnings announcements, said Complaint notes.

Breton also allegedly delayed allocation of these types of trades until later in the day after learning the substance of the announcement, the Complaint notes.

When companies made public disclaimers of positive earnings that would most likely increase the value of a stock, Breton would allegedly make disproportionate allocations of those trades to his accounts, according to the SEC’s complaint.

What is more, when a firm announced negative earnings that would most likely decrease the stock value, Breton would then also allegedly disproportionately allocate those trades to client accounts, the SEC Complaint states.

The SEC’s Complaint charges that Breton and Strategic Capital Management, based on the aforementioned behavior, allegedly violated Sections of the Securities Exchange Act and the Investment Advisers Act.  Hence, Breton and Strategic have agreed to be permanently enjoined from future misconduct, and Breton consented to the an SEC order barring him from the securities industry.

Securities Lawyers Investigating

The Peiffer Rosca Wolf securities lawyers often represent investors who lose money as a result of alleged trading schemes and are currently investigating Michael Breton and Strategic Capital Management’s alleged cherry-picking scheme. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of Michael Breton and Strategic Capital Management’s alleged cherry-picking scheme may contact the securities lawyers at Peiffer Rosca Wolf, Alan Rosca or James Booker, for a free no-obligation evaluation of their recovery options, at 888-998-0520 or via e-mail at arosca@prwlegal.com or jbooker@prwlegal.com.

Alan Rosca (1159 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.