New SEC Data Driven Enforcement Shows Results In Fraud Charges

Using a new data-driven algorithmic analysis method to detect securities fraud is bearing fruit as the Securities and Exchange Commission (SEC) announced charges against a Wisconsin-based investment advisor who bilked investors through a process known as “cherry-picking.”

SEC uses data driven analysis to uproot fraud scheme targeting investors

The SEC actions announced Monday pointed the finger at Mark P. Wellhouse of Wellhouse & Associates, saying he purchased options on behalf of clients and himself, placing the profitable trades in his own account but shuffling the unprofitable trades into the client accounts. The scheme netted Wellhouse $442,319 in ill-gotten gains by "unfairly allocating options trades" in an...