The owners of a Lisle-based investment advisory firm have been accused by the Securities and Exchange Commission of running a fraudulent "cherry-picking" scheme.
The commission filed a complaint May 16 in federal court alleging Charles J. Dushek of Warrenville, his son Charles S. Dushek of Wheaton and their firm, Capital Management Associates Inc., committed securities fraud and other violations that provided them $2 million in illicit profits.
A news release issued by the SEC says that the Dusheks "placed millions of dollars in securities trades without designating in advance whether they were trading personal or client funds."
They delayed allocating the trades so they could "cherry pick" winning trades for their personal accounts and then passed along the losing trades on the accounts of their clients, many whom are senior citizens, according to the commission.
The scheme lasted from 2008 to 2012, during which time the Dusheks made more than 13,500 purchases of securities totaling more than $350 million, according to the complaint.
SEC said the Dusheks would wait at least one trading day -- until they knew whether the trades were profitable -- before allocating them to client accounts or their personal accounts.
The SEC alleges the elder Dushek used the profits from the scheme to pay for the mortgage on his luxury home, vehicles and vacations and that the younger Dushek also used his profits for travel.