Greenwich Investment Advisor Sentenced For Defrauding Clients Of $2.7M: Feds

GREENWICH, CT — A Greenwich investment advisor was sentenced Tuesday to 21 months in prison for defrauding more than 45 clients out of $2.7 million through a "cherry-picking" securities scheme, according to a news release from Vanessa Roberts Avery, United States Attorney for the District of Connecticut

Jonathan Vincent Glenn, 55, of Greenwich, was sentenced by U.S. District Judge Robert N. Chatigny in Hartford. Following his prison sentence, Glenn must serve three years of supervised release, with the first six months in home confinement. He is also required to make full restitution.

"Cherry-picking" is a fraudulent securities trading practice in which the responsible individual executes trades without assigning those trades to a particular trading account until the individual determines whether or not the trade has become profitable or suffered losses, Avery noted in a news release.

The responsible individual then allocates the profitable trades to favored accounts – often the individual’s own accounts – and assigns unprofitable trades to disfavored client accounts.

According to court documents and statements made in court, 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, according to Avery.

Glenn placed trades on behalf of advisory clients, himself, or family members by trading directly in the relevant individual account, or by placing block trades in Glenn Capital’s omnibus account and allocating the block trades among the relevant individual accounts, Avery said.

Glenn Capital’s code of ethics required Glenn to determine and document the specific allocation of each block trade prior to the execution, and to allocate block trades to individual accounts at an average price, Avery added.

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, Avery said.

"Notwithstanding the requirements set forth 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," Avery said.

When a block purchase of an equity security increased in value in the hours after the purchase, Glenn generally realized the profits by selling the security, Avery said. He then allocated those profits to favored-client, family, firm, and personal accounts.

When a block purchase of an equity security decreased in value, Glenn generally allocated those block purchases to the non-favored-client accounts, Avery noted. Glenn did not inform his clients that he was "cherry picking," and instead he gave the false impression that he allocated trades fairly and according to a predetermined allocation methodology, according to Avery.

Glenn pleaded guilty to securities fraud in October 2023. He is currently released on bond and is required to report to prison on Dec. 2.

The case was investigated by the Federal Bureau of Investigation with the assistance of the U.S. Securities and Exchange Commission, which has settled fraud charges with Glenn and GlennCap LLC.

This case was prosecuted by Assistant U.S. Attorney Heather L. Cherry.