UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE ACT OF 1934 

Release No. 87283 / October 10, 2019

ADMINISTRATIVE PROCEEDING 

File No. 3-18171

In the Matter of

Jeremy A. Licht d/b/a

JL Capital Management,

Respondent.

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ORDER APPROVING 

PLAN OF DISTRIBUTION

On September 12, 2017, the Commission issued an Order Instituting Administrative and 

Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, 

Sections 203(f) and 203(k) of the 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 (the “Order”)1 against Jeremy A. Licht d/b/a JL Capital Management 

(“Licht” or the “Respondent”). In the Order, the Commission found that, from at least January 

2011 to November 2015, Licht engaged in a fraudulent trade allocation scheme, or “cherrypicking” that harmed his advisory clients. Licht allocated a disproportionate number of 

favorable trades (i.e., trades that had a positive first-day return) to his own account and allocated 

a disproportionate number of unfavorable trades (i.e., trades that had a negative first-day return) 

to his clients’ accounts over which he had discretionary authority. He generally traded the same 

securities for his clients’ accounts and his personal accounts. Licht executed this scheme by 

trading in an omnibus account and delaying allocation of those trades to a specific account until 

he had an opportunity to observe the security’s intraday performance. In many cases, when the 

price of a stock rose on the purchase date, Licht sold the security the same day, locking in a daytrading profit that he allocated to himself. By contrast, Licht disproportionately allocated 

purchases that were not profitable on the purchase date to clients. Licht often waited several 

hours and/or until after the close of the trading day to allocate trades from his omnibus account.

Licht’s cherry-picking financially benefited him and disadvantaged his clients.

The Commission ordered Licht to pay a total of $278,289.34 in disgorgement, 

prejudgment interest, and a civil money penalty to the Commission. In the Order, the 

Commission established a fair fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 

2002, so that the civil penalty, along with the disgorgement and prejudgment interest, can be 

distributed to harmed investors (the “Fair Fund”). 

 

1 Exchange Act Rel. No. 81584 (Sept. 12, 2017).
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The Respondent has paid a total of $278,289.34 pursuant to the Order.

The Fair Fund is deposited in an interest-bearing account at the United States Treasury 

Department’s Bureau of the Fiscal Service. The assets of the Fair Fund are subject to the 

continuing jurisdiction and control of the Commission. 

On August 22, 2019, the Commission published a Notice of Proposed Plan of 

Distribution and Opportunity for Comment (the “Notice”)2 pursuant to Rule 1103 of the 

Commission’s Rules on Fair Fund and Disgorgement Plans.3 The Notice advised interested 

persons that they could obtain a copy of the proposed Plan of Distribution (the “Plan”) from the 

Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm or by submitting a 

written request to Noel Gittens, United States Securities and Exchange Commission, 100 F 

Street, NE, Washington, DC 20549-5876.

The Notice also advised that all persons desiring to comment on the Plan could submit 

their comments, in writing, no later than thirty (30) days from the publication of the 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/admin.shtml); or (3) by sending an e-mail to rulecomments@sec.gov. The Commission received no comments on the Plan during the comment 

period. 

The Plan provides for the distribution of the Net Fair Fund4to investors who were 

harmed as a result of the Respondent’s fraudulent allocation or “cherry-picking” scheme and 

who suffered losses as calculated by the methodology described in paragraph 11 of the Plan.

The Division of Enforcement now requests that the Commission approve the Plan. 

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s 

Rules on Fair Fund and Disgorgement Plans,5that the Plan is approved, and posted 

simultaneously with this order on the Commission’s website at www.sec.gov. 

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

Vanessa A. Countryman 

Secretary

 

2 Exchange Act Rel. No. 86733 (Aug. 22, 2019).

3

17 C.F.R. § 201.1103.

4 Capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.

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17 C.F.R. § 201.1104.