Breton allegedly purchased securities for his own accounts and the client accounts through a block trading or master account on days when public companies scheduled earnings announcements.
He typically delayed allocation of those trades until later in the day after learning the substance of the announcement.
According to the SEC’s complaint, when companies announced positive earnings that would presumably increase the stock value, Breton disproportionately allocated those trades to his accounts.
When a company announced negative earnings that would presumably decrease the stock value, Breton disproportionately allocated those trades to client accounts.
