INVESTORS: Investment Adviser Bell Rock Capital and its principal, M. Cassandra Toroian were charged by the SEC with operating a multi-year cherry-picking scheme that defrauded Bell Rock clients.
On February 25, 2022, the SEC announced charges against Rehoboth Beach, Delaware-based Bell Rock Capital, LLC, and its principal, M. Cassandra Toroian, for operating a multi-year cherry-picking scheme that defrauded Bell Rock clients.
The SEC’s complaint alleged that from January 1, 2011 through December 31, 2015, Toroian traded securities in Bell Rock’s master trading account and delayed allocating the securities to specific client accounts until after she had observed the securities’ performance over the course of the day. She allegedly then disproportionately allocated profitable trades to accounts that belonged to her and her family members and allocated less profitable and losing trades to client accounts.
According to the SEC, the securities that Toroian allocated to accounts held by Toroian and her family members increased in value by more than 2%, or a gain of over $1 million, between the time Toroian purchased them and when she allocated them. By contrast, the securities that Toroian allocated to her clients’ accounts decreased in value by -more than 1.3%, or a loss of over $1 million, between the time Toroian purchased them and when she allocated them. Additionally, Bell Rock and Toroian misrepresented to clients that all trades would be allocated fairly and that Bell Rock and Toroian would not put their interests before their clients’ interests.
The SEC complaint alleges that Bell Rock failed to implement policies and procedures designed to prevent Toroian’s cherry-picking practices. The complaint charges Bell Rock and Toroian with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1), 206(2) of the Investment Advisers Act of 1940. It also charges Bell Rock with failing to adopt and implement adequate compliance policies in violation of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder and charges Toroian with aiding and abetting those violations.
If you have any information about Bell Rock Capital and its principal, M. Cassandra Toroian, that you would like to share or discuss, please call our firm for a confidential consultation. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.