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Fairfield County resident Jonathan Vincent Glenn, age 55, of Greenwich, will serve 21 months in prison, followed by three years of supervised release.
The sentencing was announced in Hartford on Tuesday, Sept. 17.
Glenn also must serve the first six months of his supervised release in home confinement.
“Cherry-picking” is a fraudulent securities trading practice in which a responsible individual executes trades without assigning them to a particular trading account until the individual determines whether or not the trade has become profitable or suffered losses.
The responsible individual then allocates the profitable trades to favored accounts – often the individual’s accounts – and assigns unprofitable trades to disfavored client accounts.
According to court documents and statements, Glenn owned Glenn Capital LLC, also known as GlennCap LLC, an investment advisory firm headquartered in Greenwich.
Through Glenn Capital, Glenn provided clients with portfolio management services, including asset selection and asset allocation.
Glenn managed all of Glenn Capital’s advisory clients’ accounts and was authorized to make trading decisions on each client’s behalf without seeking approval for each trade.
The filings by the United States Attorney for the District of Connecticut say that Glenn placed trades on behalf of advisory clients, himself, or family members.
He would trade directly in the relevant individual account or by putting block trades in Glenn Capital’s omnibus account and allocating the block trades among the relevant individual accounts.
Glenn Capital’s Code of Ethics required Glenn to determine and document the specific allocation of each block trade before the execution, and to allocate block trades to individual accounts at an average price.
Glenn defrauded clients by retroactively allocating profitable omnibus-account trades to favored clients, family, and personal accounts and unprofitable omnibus-account trades to non-favored client accounts.
Notwithstanding the requirements outlined in the Code of Ethics, Glenn did not determine the allocation of block trades until after they were executed when he knew if the trades were profitable in the hours following the execution.
When a block purchase of an equity security increased in value hours after the purchase, Glenn generally realized the profits by selling the security.
He then allocated those profits to favored clients, families, firms, and personal accounts.
When a block purchase of an equity security decreased in value, Glenn allocated those block purchases to the non-favored-client accounts.
Glenn did not inform his clients that he was “cherry-picking.” Instead, he gave the false impression that he allocated trades fairly and according to a pre-determined allocation methodology.
Through this scheme, Glenn defrauded more than 45 clients of more than $2.7 million. He is required to make full restitution.
Glenn pleaded guilty to securities fraud in October 2023.
Glenn, who is released on bond, is required to report to prison on Monday, Dec. 2.
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