Bringing Claims Against Mark Welhouse for Cherry-Picking

The Securities and Exchange Commission (SEC) recently brought charges against Mark Welhouse, of Welhouse & Associates, for cherry-picking. Cherry-picking refers to a method used by fund managers that reduces the amount of time required for researching stocks as the pool of securities in which the fund managers pick from is significantly narrowed. Welhouse did this to ensure that value options trades he gave to personal accounts would appreciate, while the trades he gave to clients, depreciated. The SEC Enforcement Division recently began an initiative against cherry-picking, in which it analyzes trade allocation data in order to identify individuals disproportionately allocating trades. Welhouse gained $442,319 through options trades in an exchange-trade fund. While he had a positive return of 6.28%, his clients had losses of 5.05%. He did this by purchasing the options and putting them in a master account for Welhouse & Assoc and delayed allocations to clients until later in the day, after which he had time to see whether the trades appreciated or depreciated.

If you invested money with Mark Welhouse, and would like to discuss your options with an attorney, please call our securities law office at 312-332-4200 for a free consultation. We sue brokers and firms such as Mark Welhouse and Welhouse & Asssociates for cherry-picking, as well as for other breaches of securities rules and regulations in the Financial Industry Regulatory Authority (FINRA) arbitration forum to help investors recover their financial losses.