UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 83873 / August 17, 2018

INVESTMENT ADVISERS ACT OF 1940

Release No. 4988 / August 17, 2018

INVESTMENT COMPANY ACT OF 1940

Release No. 33202 / August 17, 2018

ADMINISTRATIVE PROCEEDING

File No. 3-18649

In the Matter of

ROGER T. DENHA,

Respondent.

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS 

PURSUANT TO SECTIONS 15(b) and 21C 

OF THE SECURITIES EXCHANGE ACT 

OF 1934, SECTIONS 203(f) AND 203(k) OF 

THE INVESTMENT ADVISERS ACT OF 

1940, AND SECTION 9(b) OF THE 

INVESTMENT COMPANY ACT OF 1940, 

MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASEAND-DESIST ORDER

I.

The United States Securities and Exchange Commission (the “Commission”) deems it 

appropriate and in the public interest that public administrative and cease-and-desist 

proceedings be, and hereby are, instituted pursuant to Sections 15(b) and 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), Sections 203(f) and 203(k) of the Investment 

Advisers Act of 1940 (“Advisers Act”), and Section 9(b) of the Investment Company Act of 

1940 (“Investment Company Act”) against Roger T. Denha (“Denha”). 

II.

In anticipation of the institution of these proceedings, Respondent has submitted an

Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for 

the purpose of these proceedings and any other proceedings brought by or on behalf of the
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Commission, or to which the Commission is a party, and without admitting or denying the 

findings herein, except as to the Commission’s jurisdiction over him and the subject matter of 

these proceedings, which are admitted, and except as provided herein in Section V, Respondent 

consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings

Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Sections 203(f) and 

203(k) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act 

of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order 

(“Order”), as set forth below.

III.

On the basis of this Order and Respondent’s Offer, the Commission finds1that:

Summary

1. From at least January 2012 to November 2017 (the “relevant time period”), Roger 

T. Denha, an investment adviser and investment adviser representative of BKS Advisors LLC

(“BKS”), an investment adviser registered with Commission and based in Southfield, Michigan, 

engaged in fraudulent trade allocation, or “cherry-picking.” Denha executed his cherry-picking 

scheme by unfairly allocating purchases of securities between his favored accounts (including his 

personal and family accounts) and his other BKS clients’ accounts. Denha disproportionately 

allocated profitable trades to the favored accounts, and disproportionately allocated unprofitable 

trades to the accounts of certain advisory clients. He executed his scheme by buying the 

securities in an omnibus account and then waiting to allocate until after he had an opportunity to 

see whether the securities had increased in price. 

2. By virtue of his conduct, Denha willfully violated Section 10(b) of the 

Exchange Act and Rules 10b-5(a) and 10b-5(c) thereunder and Sections 206(1) and 206(2) of 

the Advisers Act.

Respondent

3. Roger T. Denha, age 61, resides in Beverly Hills, Michigan. Denha has been 

an investment adviser representative of BKS since August 2003. From August 2003 to 

September 2017, Denha was a registered representative of a firm that was registered with the 

Commission as a broker-dealer throughout that time period and terminated its registration 

effective November 30, 2017. Denha has never been an owner or principal of BKS, but he is 

the only investment adviser representative for the BKS clients that he advises. Denha has no 

disciplinary history. 

 

1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding. 
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Other Relevant Entity

4. BKS is a Michigan limited liability company with its principal place of 

business in Southfield, Michigan. BKS has been registered with the Commission as an 

investment adviser since 2001. According to its most recent Form ADV filed in March 2018, 

BKS had approximately 446 clients and $365 million in assets under management. Of these 

clients and assets, Denha had approximately 197 clients and $202 million in assets under 

management. BKS’s and Denha’s clients are primarily individual investors. 

Facts

5. During the relevant time period, all of BKS’s clients had their accounts in custody 

at a brokerage firm. To execute trades on behalf of himself and his clients, Denha sometimes 

made trades for himself and his clients in an omnibus account BKS set up for Denha’s block 

account trading at the brokerage firm. After placing a trade in the omnibus account, Denha 

instructed the brokerage firm to allocate the purchased securities among his and/or his clients’ 

accounts. By allocating shares sometime later in the day, after he placed a trade, Denha could 

watch the changes in price and then choose how to allocate the shares.

6. Denha allocated a greater proportion of profitable trades, i.e., trades that increased 

in price from the time of purchase in the omnibus account to the time of allocation later that day, 

to favored accounts and a greater proportion of unprofitable trades, i.e., trades that decreased in 

price from the time of purchase in the omnibus account to time of allocation later that day, to his 

other clients’ accounts (“disfavored accounts”). The favored accounts included accounts that 

belonged to Denha and his family members. 

7. Denha made two types of profitable trades. The first type involved realized 

profits from day-trading, i.e., selling the security on the same day it was purchased for a profit. 

The second type involved unrealized profits from buy-and-hold trades, i.e., holding a security 

that increased in value on the day it was purchased. Denha allocated a greater proportion of 

profitable day-trades and buy-and-hold trades to his favored accounts. Sometimes, Denha had a 

profitable day trade and an unprofitable buy-and-hold trade in the same security on the same day. 

When this occurred, he disproportionately allocated the profitable day trades to his favored 

accounts and the unprofitable buy-and-hold trades to his disfavored accounts. The difference 

between the allocations of profitable trades and unprofitable trades is statistically significant; the 

probability that such an uneven allocation of gains and losses occurred by chance is less than 

one-in-one-million. 

8. Combining both day trades and buy-and-hold trades, the average combined, 

realized and unrealized return (measured from purchase to sale for day trades and from purchase 

to allocation for buy-and-hold trades) for the favored accounts during the relevant time period 

was approximately 1.01% while the average combined, realized and unrealized return for the 

disfavored accounts was negative 0.16%. 

9. As a result of the cherry-picking scheme, Denha obtained at least $412,230 in 

realized and unrealized gains.
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Violations

10. By knowingly or recklessly allocating profitable trades to Denha’s favored accounts

at the expense of his other advisory clients, Denha willfully violated Section 206(1) of the Advisers 

Act, which prohibits any investment adviser from employing any device, scheme, or artifice to 

defraud any client or prospective client. 

11. Through this cherry-picking scheme and by failing to disclose the scheme, Denha

willfully2violated Section 206(2) of the Advisers Act, which prohibits any investment adviser from 

engaging in any transaction, practice, or course of business which operates as a fraud or deceit 

upon any client or prospective client.

12. By knowingly or recklessly allocating profitable trades to Denha’s favored accounts

at the expense of his other advisory clients, Denha willfully violated Section 10(b) of the Exchange 

Act and Rules 10b-5(a) and 10b-5(c) thereunder. Section 10(b) of the Exchange Act makes it 

unlawful for any person to use or employ, in connection with the purchase or sale of any security,

any manipulative or deceptive device or contrivance in contravention of such rules and regulations 

as the Commission may prescribe. Rule 10b-5 under the Exchange Act makes it unlawful for any 

person, directly or indirectly, (a) to employ any device, scheme, or artifice to defraud, and (c) to 

engage in any act, practice, or course of business which operates or would operate as a fraud or 

deceit upon any person.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer. 

Accordingly, pursuant to Sections 15(b)(6) and 21C of the Exchange Act, Sections 203(f) 

and 203(k) of the Advisers Act, and Section 9(b) of the Investment Company Act, it is hereby 

ORDERED that:

A. Respondent Denha cease and desist from committing or causing any violations 

and any future violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and 10b-5(c)

thereunder and Sections 206(1) and 206(2) of the Advisers Act. 

B. Denha be, and hereby is:

barred from association with any investment adviser, broker, dealer, municipal 

securities dealer, municipal advisor, transfer agent, or nationally recognized 

statistical rating organization; 

 

2 A willful violation of the securities laws means merely “‘that the person charged with the duty knows what he is 

doing.’” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. 

Cir. 1949)). There is no requirement that the actor “‘also be aware that he is violating one of the Rules or Acts.’” Id. 

(quoting Gearhart & Otis, Inc. v. SEC, 348 F.2d 798, 803 (D.C. Cir. 1965)).
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prohibited from serving or acting as an employee, officer, director, member of an 

advisory board, investment adviser or depositor of, or principal underwriter for, a 

registered investment company or affiliated person of such investment adviser, 

depositor, or principal underwriter; and

barred from participating in any offering of a penny stock, including: acting as a 

promotor, finder, consultant, agent or other person who engages in activities with 

a broker, dealer or issuer for the purposes of the issuance or trading of any penny 

stock, or inducing or attempting to induce the purchase or sale of any penny stock.

C. Any reapplication for association by Denha will be subject to the applicable laws 

and regulations governing the reentry process, and reentry may be conditioned upon a number of 

factors, including, but not limited to, the satisfaction of any or all of the following: (a) any 

disgorgement ordered against the Respondent, whether or not the Commission has fully or 

partially waived payment of such disgorgement; (b) any arbitration award related to the conduct 

that served as the basis for the Commission order; (c) any self-regulatory organization arbitration 

award to a customer, whether or not related to the conduct that served as the basis for the 

Commission order; and (d) any restitution order by a self-regulatory organization, whether or not 

related to the conduct that served as the basis for the Commission order. 

D. Respondent shall, within 14 days of the entry of this order, pay disgorgement of 

$412,230.00 and prejudgment interest of $35,388.00 to the Securities and Exchange

Commission. If timely payment is not made, additional interest shall accrue pursuant to SEC 

Rule of Practice 600. Payment must be made in one of the following ways:

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or

(3) Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order will be credited upon receipt by the Commission and must be 

accompanied by a cover letter identifying Roger T. Denha as the Respondent in these 

proceedings, and the file number of these proceedings; a copy of the cover letter and check or 
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money order must be sent to Robert Baker, Assistant Director, Asset Management Unit, Division 

of Enforcement, Securities and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA 

02110.

E. Respondent shall, within 14 days of the entry of this order, pay a civil money 

penalty in the amount of $169,000.00 to the Securities and Exchange Commission. If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment 

must be made in one of the following ways:

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or

(3) Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order will be credited upon receipt by the Commission and must be 

accompanied by a cover letter identifying Roger T. Denha as the Respondent in these 

proceedings, and the file number of these proceedings; a copy of the cover letter and check or 

money order must be sent to Robert Baker, Assistant Director, Asset Management Unit, Division 

of Enforcement, Securities and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA 

02110. 

F. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, a Fair 

Fund is created for the disgorgement, prejudgment interest and penalties referenced in paragraphs 

IV.D. and IV.E. above. This Fair Fund is expected to include all funds collected from the 

Commission’s related proceeding, In the Matter of BKS Advisors, LLC (Admin. Proc. File No. 

3-18648 filed August 17, 2018). The Fair Fund will be distributed to harmed investors in 

accordance with a Commission-approved plan of distribution. Amounts ordered to be paid as civil 

money penalties pursuant to this Order shall be treated as penalties paid to the government for all 

purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 

Respondent agrees that in any Related Investor Action, he shall not argue that he is entitled to, 

nor shall he benefit by, offset or reduction of any award of compensatory damages by the amount 

of any part of Respondent’s payment of a civil penalty in this action (“Penalty Offset”). If the 

court in any Related Investor Action grants such a Penalty Offset, Respondent agrees that he 

shall, within 30 days after entry of a final order granting the Penalty Offset, notify the 
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Commission’s counsel in these proceedings and pay the amount of the Penalty Offset to the 

Securities and Exchange Commission. Such a payment shall not be deemed an additional civil 

penalty and shall not be deemed to change the amount of the civil penalty imposed in these 

proceedings. For purposes of this paragraph, a “Related Investor Action” means a private 

damages action brought against Respondent by or on behalf of one or more investors based on 

substantially the same facts as alleged in the Order instituted by the Commission in these 

proceedings.

V.

It is further Ordered that, solely for purposes of exceptions to discharge set forth in 

Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the findings in this Order are true and 

admitted by Respondent Roger T. Denha, and further, any debt for disgorgement, prejudgment 

interest, civil penalty or other amounts due by Respondent Roger T. Denha under this Order or 

any other judgment, order, consent order, decree or settlement agreement entered in connection 

with these proceedings, is a debt for the violation by Respondent Roger T. Denha of the federal 

securities laws or any regulation or order issued under such laws, as set forth in Section 

523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).

By the Commission.

Brent J. Fields

Secretary