Gregory A. Zandlo, 63, of Coon Rapids, Minnesota, is the founder, president, sole owner, and sole employee of North East Asset Management Group, Inc., a Minnesota-registered investment adviser in Minneapolis that reported $28.5 million in regulatory assets under management. A certified financial planner since 1992, Zandlo was North East’s only investment adviser representative, meaning every client of the firm dealt with him. From December 2020 through May 2022, Zandlo used that position to defraud his own clients through a practice called cherry-picking: the fraudulent allocation of profitable trades to favored accounts and unprofitable trades to disfavored ones. Zandlo placed aggregated block trades and then, after seeing how they performed, disproportionately allocated the profitable ones to his own accounts, his family members’ accounts, and North East’s account, while steering the losing trades to 78 other advisory client accounts. In June 2025 the SEC charged Zandlo and North East, and in 2026 the matter proceeded to the distribution of recovered funds to the harmed clients.
Without admitting or denying the findings, Zandlo and North East consented to a cease-and-desist order. Zandlo agreed to pay disgorgement of $80,599, prejudgment interest of $17,172.47, and a civil penalty of $141,000. North East agreed to pay disgorgement of $10,609 and prejudgment interest of $2,260. Zandlo was barred from association with any investment adviser, broker, dealer, or other regulated entity. In July 2026, the SEC issued a proposed plan of distribution to return recovered funds to the harmed clients through a Fair Fund. The SEC charged Zandlo and North East with willful violations of the antifraud provisions of Section 10(b) of the Exchange Act and Sections 206(1) and 206(2) of the Investment Advisers Act.
91% Winning Days for the Favored Accounts, 31% for Everyone Else
The statistical evidence of cherry-picking in Zandlo’s case is stark and difficult to explain by chance. During the eighteen-month scheme, 91% of the dollars traded in the favored accounts, meaning Zandlo’s own accounts, his family’s accounts, and the firm’s account, saw a positive return by the end of the trading day. In the 78 other client accounts, only 31% of the dollars traded had a positive return by the end of the day. That gap, 91% versus 31%, is the signature of cherry-picking. When an adviser allocates trades fairly, the win rate across all accounts should be broadly similar, because the accounts are participating in the same trades. A win rate nearly three times higher in the accounts that benefit the adviser personally indicates that the profitable trades were being systematically routed to those accounts and the losing trades to the clients. The same statistical signature drove the cases against Jonathan Glenn of GlennCap, who went to prison for the practice, and Matthew Werthe of HSR Wealth Management. Over the eighteen months, the favored accounts received profits of approximately $105,820, while the 78 client accounts suffered losses of approximately $112,667.
The mechanism that made this possible was block trading. Zandlo had discretionary authority over his clients’ accounts and the ability to place aggregated orders, called blocks, that combined securities transactions on behalf of multiple client accounts into a single order. Block trading is a legitimate and common practice: it lets an adviser execute a large order efficiently and then allocate the resulting shares across client accounts, typically at the average price of all the executions. The practice becomes fraud when the adviser waits to see how a trade performs before deciding which accounts to allocate it to. Zandlo, according to the SEC, placed block trades, sometimes after the close of the market on a given day, and then allocated the winners to himself and his family and the losers to his clients. The discretion that clients granted him to manage their money efficiently became the tool he used to skim their profits.
A Sole Practitioner Who Was Every Client’s Only Adviser
The structure of North East Asset Management amplified the breach of trust. Zandlo was not one adviser among many at a large firm with compliance oversight and supervisory review. He was the founder, president, sole owner, and sole employee, and the firm’s only investment adviser representative. Every one of the firm’s clients relied entirely on him. There was no colleague to notice the allocation pattern, no supervisor to review the block trades, no compliance officer to flag that the principal’s accounts were winning while the clients’ accounts were losing. The concentration of authority that made North East a simple, personal advisory practice also removed every internal check that might have caught the cherry-picking. Clients who chose a small, personal firm with a certified financial planner they could deal with directly got exactly that, and the SEC found that the person they trusted was allocating the firm’s losing trades to their accounts. The cherry-picking practice is a recurring subject of SEC enforcement precisely because it is difficult for individual clients to detect on their own.
A Fair Fund to Return Money to the 78 Harmed Client Accounts
The remedial structure of the case is designed to return money to the clients who were harmed. Zandlo’s disgorgement of $80,599 and North East’s disgorgement of $10,609, together with the prejudgment interest and Zandlo’s $141,000 civil penalty, form a pool that the SEC’s July 2026 proposed plan of distribution allocates back to the harmed clients through a Fair Fund. The $141,000 penalty is notably larger than the $80,599 Zandlo personally gained, reflecting the SEC’s treatment of cherry-picking against one’s own advisory clients as a serious breach of fiduciary duty. The industry bar prevents Zandlo from associating with any investment adviser or broker going forward, ending his ability to manage other people’s money. For the 78 clients whose accounts absorbed the losing trades so that Zandlo’s and his family’s accounts could absorb the winners, the Fair Fund is the mechanism through which some of what they lost is returned.
Conclusion
Gregory Zandlo was the only adviser at his own firm, trusted by 78 clients to manage $28.5 million. For eighteen months he placed block trades, watched to see which ones won, and then gave the winners to himself and his family and the losers to his clients. His favored accounts won 91% of the time. His clients won 31% of the time. He skimmed about $105,820 in profits while his clients lost about $112,667. There was no one at his one-man firm to catch it. The SEC charged him in 2025, barred him from the industry, ordered him to pay a $141,000 penalty on top of returning his gains, and set up a Fair Fund to repay the clients in 2026. The discretion they gave him to trade for them, he used to trade against them.
