Securities Regulation Daily Wrap Up, ENFORCEMENT—N.D. Ill.: SEC charges Chicago resident and his companies in alleged $3.6 million investment fraud, (Jun 10, 2026)

By Kristin J. Angelino, J.D.

The complaint alleged that many of defendant’s investors had familial and other personal ties to him, making them “predisposed to trust him.”

The SEC has charged John Sterling Myers and his two solely owned companies, Sterling Capital, LLC (Sterling Capital) and Sterling Capital Management, LLC (SCM), with allegedly defrauding approximately 28 investors over a two-year period while acting as investment advisers to a pooled investment vehicle called Sterling Capital Investments, LLC (the Fund). Among other misconduct, the defendants’ alleged scheme involved misappropriating approximately $3.6 million in investor money and falsifying investor account statements. The SEC is seeking permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties against all defendants (SEC v. Myers, No. 1:26-cv-06696 (N.D. Ill. Jun. 5, 2026)).

The alleged scheme. According to the SEC’s complaint, from January 2022 through at least July 2025, defendant Myers offered and sold limited liability interests to investors in approximately five states by touting his prior investment banking experience in New York City and purported success in securities trading. He routinely falsely assured investors that the Fund had outperformed the S&P 500 and that their individual investments had grown in value when, in reality, he regularly lost money trading and misappropriated approximately $1.8 million of investor funds by diverting the assets to his personal financial accounts. He used the $1.8 million to engage in additional unsuccessful trading and for various personal expenses. Of the approximately $4 million raised from investors, only approximately $398,000 was repaid.

False marketing. As alleged, Myers created a summary marketing brochure for the Fund which included a chart, which he periodically updated, comparing the monthly performance of the Fund to the monthly performance of the S&P 500 and falsely stating that the Fund’s performance exceeded the S&P 500’s performance. In fact, Myers misappropriated part of the Fund’s assets for his own personal expenses and lost the majority of the remainder through unsuccessful options trading.

Misappropriation of funds. The SEC’s complaint further alleged that Myers did not open any financial accounts in the name of the Fund and instead routed Fund offering proceeds to legal entities owned entirely by him (Sterling Capital and SCM) and then diverted a significant amount of the proceeds to his personal financial accounts, where Myers commingled investor money with money from other sources, such as personal loans and credit card cash advances. Myers used such commingled funds for unsuccessful options trading and to pay for personal expenses, including personal credit card debt and rent for his family residence.

Fabricated account statements. The SEC’s complaint also alleged that Myers created and gave investors fabricated quarterly account statements which purported to show individual annual gains ranging from 16% to 54%. Myers allegedly based his bogus calculations of investor returns largely on a fictitious Fund NAV, since nearly all the tangible assets of value that Myers included in the Fund NAV, collectively valued at approximately $1.2 million, were not actually owned by the Fund but, instead, belonged to Myers’ father-in-law.

As alleged, Myers’s father-in-law had separately invested in the Fund, and he occasionally permitted Myers to execute trades on his behalf in one of his individual accounts. In April 2024, Myers significantly depleted his father-in-law’s largest retirement account through options trading, losing hundreds of thousands of dollars. Subsequently, to offset the negative impact these (and other) trading losses would have on Myers’s calculation of the Fund’s NAV, Myers added the purported value of Sterling Capital itself in his calculation of the value of the Fund, effectively increasing the Fund’s NAV by over $1 million. His valuation of Sterling Capital reflected the present value of earning $250,000 per year for the next 40 years, even though his estimated earnings were hypothetical and Myers had earned no income for years.

Failure to provide tax forms. To conceal his trading losses from investors, Myers and SCM allegedly did not issue any Schedule K-1s to investors or file any tax returns for the Fund. Instead, Myers claimed the trading losses on personal tax returns he filed jointly with his wife.

Violations and relief sought. The SEC’s complaint charged 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 charged defendant Myers with control person liability pursuant to Section 20(a) of the Exchange Act. The SEC is seeking permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties against all defendants.

The case is No. 1:26-cv-06696.

Attorneys: Michael D. Foster for the SEC.

Companies: Sterling Capital, LLC; Sterling Capital Management, LLC

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