Securities and Exchange Commission v. Cobb
- P. Castel
- 1:24-cv-09494
- U.S. District Court · Southern District of New York
- 3
In Securities and Exchange Commission v. Cobb, Judge Castel adjourned Cobb’s response deadline and initial conference while the SEC’s allegations remain unresolved.
The SEC and Eric M. Cobb; the order changes Cobb’s response deadline and the date of the initial pretrial conference.
What happened
Securities and Exchange Commission v. Cobb concerns the SEC’s allegations that Eric Cobb, a former investment adviser representative, used delayed trade allocations to keep profitable trades and assign losing trades to clients. The SEC also alleges that Cobb’s trading strategy violated his duties to certain clients.
The court adjourned Cobb’s deadline to respond to the complaint until March 19, 2025, with Cobb’s consent. It also adjourned the initial pretrial conference from February 24 to March 24, 2025, at 10:30 a.m. The order did not decide whether the SEC’s allegations are true.
Judge P. Kevin Castel entered the scheduling order. The case’s merits remain unresolved.
The detailed version
- Securities and Exchange Commission v. Cobb · No. 1:24-cv-09494
- P. Castel
- Feb. 18, 2025
Background
The Securities and Exchange Commission (SEC) filed a complaint against Eric Cobb. The complaint alleges that Cobb, a former investment adviser representative, violated securities-law anti-fraud provisions through a long-running trade-allocation scheme, commonly called “cherry-picking.” According to the allegations, Cobb placed trades in a combined account, waited at least one day, and then assigned more profitable trades to accounts held by himself and his wife while assigning unprofitable trades to client accounts.
The complaint further alleges that Cobb traded volatile securities, including leveraged exchange-traded funds, and that this strategy was unsuitable and contrary to the best interests of certain clients. The SEC alleges approximately $170,000 in unlawful profits and approximately $188,000 in aggregate client losses. These allegations were not decided by the order summarized here.
Scheduling Request and Order
The SEC asked the court to postpone the initial pretrial conference for approximately 30 days because the parties had not meaningfully conferred as required by Federal Rule of Civil Procedure 26(f). The SEC said Cobb had only recently communicated with it, had indicated that he would try to obtain pro bono counsel, and had requested additional time to answer the complaint. Cobb consented to the requested postponement.
The court ordered that Cobb’s time to respond to the complaint be adjourned until March 19, 2025. It also adjourned the initial pretrial conference until March 24, 2025, at 10:30 a.m. The SEC’s alternative proposal for a case-management plan was not adopted in the order shown. Judge P. Kevin Castel entered the order. The order is procedural and does not resolve the SEC’s claims or Cobb’s defenses.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.