The allegations read: On september 18, 2024, the u.s. District court for the district of arizona issued this complaint as to respondent raymond j. Dimuro. Plaintiff securities and exchange commission ("sec") alleges: this government enforcement action concerns a "cherry-picking" scheme perpetrated by dimuro. At the time of the scheme, dimuro was an investment adviser representative and principal of your source financial, plc ("your source"), an arizona company that was then registered with the sec as an investment adviser. From at least january 2018 to january 2022, dimuro traded securities for your source clients as their investment adviser. Dimuro had discretionary authority over the clients' accounts, meaning he had the authority to make investment decisions and execute trades on the clients' behalf. He executed most of the client trades through a block trading account, which allowed him to place securities trades and later allocate the trades to various clients. Because he was able to allocate after placing the block trades, dimuro began to "cherry-pick" - he disproportionately allocated winning trades to some favored accounts (the "favored clients") and losing trades to other disfavored accounts (the "unfavored clients"). As a result of dimuro's trade allocations, the favored clients received substantial trading profits and the unfavored clients suffered substantial trading losses. By allocating trades in a way that favored some clients and disfavored other clients, dimuro violated the fiduciary duties that an investment adviser owes to his clients, including his duty of care and duty of loyalty to his advisory clients. By engaging in this conduct, dimuro violated the antifraud provisions of sections 17(a)(1) and 17(a)(3) of the securities act, section 10(b) of the exchange act, and rules 10b-5(a) and 10b-5(c) thereunder, and sections 206(1) and 206(2) of the advisers act.
