UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 83364 / June 4, 2018

ADMINISTRATIVE PROCEEDING

File No. 3-14993

____________________________________

:

In the Matter of :

:

MIDDLECOVE CAPITAL, LLC and : NOTICE OF PROPOSED 

NOAH L. MYERS : PLAN OF DISTRIBUTION 

: AND OPPORTUNITY

: FOR COMMENT

Respondents. :

___________________________________ :

Notice is hereby given, pursuant to Rule 1103 of the Securities and Exchange 

Commission’s (“Commission”) Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. 

§ 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan 

of distribution (the “Plan”) for the distribution of monies collected in the above-captioned matter. 

On January 16, 2013, the Commission issued an Order Making Findings and Imposing 

Remedial Sanctions and a Cease-and Desist Order Pursuant to Sections 15(b) and 21C of the 

Securities Exchange Act of 1934, Sections 203(e), 203(f), and 203(k) of the Investment Advisers 

Act of 1940, and Section 9(b) of the Investment Company Act of 1940 (the “Order”)1against 

MiddleCove Capital, LLC (“MiddleCove”) and Noah L. Myers (“Myers”) (collectively, the 

“Respondents”). The Order found, among other things, that from approximately October 2008 

through February 2011 (the “relevant period”), Myers engaged in fraudulent trade allocation –

“cherry-picking” - at MiddleCove. During the relevant period, MiddleCove was a registered 

investment adviser. Myers executed his cherry-picking scheme by unfairly allocating trades that 

had appreciated in value during the course of the day to his personal and business accounts and 

allocating trades that had depreciated in value during the day to the accounts of his advisory 

clients. He did this by purchasing securities in an omnibus account and delaying allocation of 

the purchases until later in the day (and sometimes the next day), after he saw whether the 

securities appreciated in value. When a security appreciated in value on the day of purchase, 

Myers would often sell the security and disproportionately allocate the purchase and the realized 

day-trading profit to his own accounts or accounts benefiting himself or his family members. In 

contrast, for securities that did not appreciate on the day of purchase, Myers would 

disproportionately allocate these purchases to his clients’ accounts and his clients would hold the 

 

1 Exchange Act Rel. No. 68669 (Jan. 16, 2013).
2

position for more than one day. Myers carried out his cherry-picking scheme with regard to 

several securities, but was most active with an inverse and leveraged exchange traded fund called 

ProShares UltraShort Financials or SKF. Neither MiddleCove nor Myers disclosed to clients 

that they were engaged in cherry-picking and that they would favor Myers’s accounts in the 

allocation of appreciated securities. As a result of his fraud, Myers realized ill-gotten gains of 

$462,022. The Order required Respondents to pay disgorgement of $462,022, prejudgment 

interest of $26,096, and a civil money penalty of $300,000. Neither MiddleCove nor Meyers 

made any payment toward their monetary obligations, accordingly, on March 20, 2013, the 

Commission filed an Application for an Order Compelling Respondents to Show Cause Why a 

Judgment Should Not Be Entered Against Them Pursuant to Section 21(e) of the Securities 

Exchange Act of 1934 with the United States District Court for the District of Connecticut (Case 

No. 13-mc-00045). MiddleCove and Myers failed to appear, plead, or otherwise defend the 

District Court action, thus, on June 28, 2013 the Commission filed a Motion for Default 

Judgment. On July 11, 2013, the court issued an order that entered a Default Judgment against 

MiddleCove and Meyers. To date, the Commission has collected $33,086.05 towards the 

Respondents’ Default Judgment (the “Distribution Fund”). 

The Distribution Fund is subject to the continuing jurisdiction and control of the 

Commission and the Distribution Fund has been deposited at the United States Department of 

Treasury’s (“U.S. Treasury”) Bureau of the Fiscal Service (“BFS”) for investment. Other than 

potential interest income from the BFS investment, the Commission does not anticipate that the 

Distribution Fund will receive additional funds. 

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of 

the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm. 

Interested persons may also obtain a written copy of the Plan by submitting a written request to 

Michael S. Lim, Esq., United States Securities and Exchange Commission, 100 F Street, NE, 

Washington, DC 20549-5876. All persons who desire to comment on the Plan may submit their 

comments, in writing, no later than thirty (30) days from the date of this Notice:

1. to the Office of the Secretary, United States Securities and Exchange 

Commission, 100 F Street, NE, Washington, DC 20549-1090;

2. by using the Commission’s Internet comment form 

(http://www.sec.gov/litigation/fairfundlist.htm); or 

3. by sending an e-mail to rule-comments@sec.gov.

Comments submitted should include “Administrative Proceeding File No. 3-14993” in the 

subject line. Comments received will be publicly available. Persons should submit only 

information that they wish to make publicly available.
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THE PLAN

The Net Distribution Fund is comprised of the monies collected from the Respondents, 

plus any accumulated interest, less any federal, state, or local taxes and fees and expenses. The 

Plan provides for distribution of the Net Distribution Fund to certain harmed parties previously 

identified by Commission staff in accordance with paragraph 7 of the Plan.

For the Commission, by its Secretary, pursuant to delegated authority. 

Brent J. Fields

Secretary