The SEC Brought an Enforcement Action Against Investment Advisor John Sterling Myers, Sterling Capital, LLC and Sterling Capital Management, LLC

• June 18, 2026
• Uncategorized

John Sterling Myers (CRD#: ) is an investment advisor at Sterling Capital, LLC and Sterling Capital Management, LLC in Chicago, IL.

Broker’s Background

John Sterling Myers founded Sterling Capital, LLC in 2013.

Current And Past Allegations Of Conduct Leading To Investment Loss

According to publicly available records released by the U.S. Securities and Exchange Commission (SEC), On June 5, 2026, the Securities and Exchange Commission charged John Sterling Myers and his two companies, Sterling Capital, LLC (“Sterling Capital”) and Sterling Capital Management, LLC (“SCM”), with allegedly engaging in a multi-year fraud.

According to the SEC’s complaint, from January 2022 through at least July 2025, the Defendants misappropriated investor money, falsified investor account statements, and engaged in other misconduct while acting as investment advisers to a pooled investment vehicle, Sterling Capital Investments, LLC (the “Fund”). The complaint alleges that Myers began operating this so-called “premier” and “exclusive investment pool” in 2022, through Sterling Capital and SCM, and raised approximately $4 million from approximately 28 investors over several years. The complaint further alleges that unbeknownst to investors, Myers perpetually drained the pool through unsuccessful trading and personal spending, and that over $3.6 million of investors’ money is gone. As alleged, Myers sent investors fabricated quarterly account statements depicting accumulated net gains and positive performance beyond that of the S&P 500, and he further concealed the Fund’s actual results by failing to issue tax forms to investors, as required by the Fund’s offering documents, to inform them of their distributive share of the Fund’s losses. Instead, according to the complaint, Myers claimed all trading losses on his own personal tax returns without making any disclosure to Fund investors. Myers allegedly misappropriated at least $1.8 million by diverting Fund assets to his personal financial accounts, through which he engaged in further unsuccessful trading and paid for various personal expenses.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of Illinois, charges the Defendants with violating Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The complaint also charges Myers with control person liability pursuant to Section 20(a) of the Exchange Act. The complaint seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties against all Defendants.

The SEC’s investigation was conducted by Dee A. O’Hair, Lee Farnsworth, and Craig McShane and supervised by Amy Flaherty Hartman and Anne McKinley of the SEC’s Chicago Regional Office. The litigation will be led by Michael Foster and Ashley Dalmau-Holmes and will be supervised by Eric Phillips, also of the Chicago Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of Illinois.

 

For a copy of the SEC release, click here.

We Help Investors Recover Investment Losses

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

 

FINRA Rule 2150 specifically addresses theft and conversion in a customer account, stating “no member or person associated with a member shall make improper use of a customer’s securities or funds.”  This rule includes any “guarantee” that brokers make to customers in relation to losses incurred in a brokerage account.

 

In addition, FINRA Rule 3240 strictly prohibits a financial advisor from borrowing money from a client absent from unique circumstances, such as a familial relationship between the Financial Advisor and the client.  There is also an exception if the client is a financial institution regularly engaged in the business of lending.  The reason for this prohibition is clear—borrowing money from clients creates an immediate conflict of interest and can potentially lead to theft or conversion of client assets.

 

Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.

 

Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed.  FINRA Rule 3280 prohibits Financial Advisors from engaging in Private Securities Transactions, which are securities transactions that take place away from the employing brokerage firm.  The purpose of these rules is to ensure that Financial Advisors do not engage in selling away.  The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business, or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.

 

The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.

 

Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.

 

Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation. Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients.

 

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the financial advisors’ sales practices and dealings with clients.

 

FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.

 

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.