The SEC filed a settled action against a state-registered investment adviser, North East Asset Management Group, Inc., and its sole principal, owner, and employee for engaging in cherry-picking that disproportionately allocated certain profitable trades to the firm, the owner, and certain favored accounts, and allocated unprofitable trades to other advisory clients. The SEC’s complaint noted that the firm managed a block trading account that allowed the firm to aggregate securities transactions on behalf of multiple client accounts. The firm placed orders in the block trading accounts that were often filled and executed at different price points throughout a given trading day. The firm allocated portions of each “block” of securities purchased to different client accounts, sometimes after the close of the market on a trading day. As a result, over an 18-month period, the favored accounts had a 91.6% win rate and a 2.47% profit rate, resulting in profits of approximately $105,820. The unfavored accounts had a 31.3% win rate and a profit rate of -1.01% resulting in losses of approximately $112,667. This case highlights the SEC's ongoing focus on cherry-picking, using investment discretion to favor the adviser and its related persons over other clients.