October 20, 2020
The Securities and Exchange Commission (SEC) recently filed a Complaint in the U.S. District Court for the District of Nebraska against Corbin Lambert, the former CEO of Continuum Financial, LLC, a Nebraska-registered investment advisory firm, for a cherry-picking scheme.
According to the Complaint, for over a year starting in at least January 2017, Lambert engaged in block purchasing options securities in Continuum’s omnibus account and delayed the allocation of these securities to individual accounts until he observed how the securities performed throughout the trading day. Lambert then “cherry picked,” or disproportionately allocated profitable trades, to his personal account and allocated the less profitable trades to his clients. Continuum’s custodian broker, Charles Schwab detected this fraudulent activity and confronted him and terminated Continuum from its trading platform in April 2018. Lambert’s partners at Continuum then removed him as CEO once they learned of the cherry-picking scheme, though he remains an Investment Adviser Representative with the firm.
The SEC asserts in the Complaint that Lambert violated his fiduciary duties to his clients, falsely promising that all trades in their accounts would be allocated in a fair in equitable manner, and violated antifraud provisions of the federal securities laws. Lambert’s clients suffered first-day trading losses and negative trading returns.
The SEC seeks permanent injunctive relief against Lambert to prevent future violations of federal securities laws, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
According to his FINRA BrokerCheck report, Corbin Lambert has been actively associated with Securities America, Inc. as well as Continuum Financial in Omaha, Nebraska since 2015. He has been associated with six other FINRA member firms since entering the securities industry in 1999, including MML Investors Services, LLC from May 2007 to June 2015. He does not have any other disclosures other than the pending civil case by the SEC.