The U.S. Securities and Exchange Commission has scheduled administrative hearings starting next month in New London to investigate allegations against a Lyme investment adviser tied to a cherry-picking scheme that may have cost local investors more than $2 million.

The initial public hearing into the dealings of Noah L. Myers, scheduled at 9:30 a.m. Dec. 10 before Administrative Law Judge Cameron Elliott, will be held at the U.S. Department of Labor Hearing Room on the second floor of the 5 Shaw's Cove office complex.

Myers, accused earlier this year in SEC documents of fraudulent trading practices, was sole owner and chief investment adviser at Essex-based MiddleCove Capital LLC.

SEC spokesmen said the administrative hearing is similar to a trial, with witnesses being called and documents entered into evidence. A decision on possible penalties and sanctions is expected by the middle of next year.

Hearings normally last a week or more, they said, with some running as long as a month.

The spokesmen said the decision to try the case as an administrative matter doesn't preclude the state, the federal government or groups of investors from filing civil suits or even criminal charges.

According to regulatory documents released in August, Myers commingled his own financial transactions with those of his clients and then took the most profitable trades as his own, a practice known as cherry picking. The SEC's Division of Enforcement charged that Myers had earned profits of $460,000 from the scheme, while clients suffered losses.

"He did not offer a plausible explanation for his stellar day-trading performance," the SEC said in its allegations.

A judge could penalize Myers if the SEC charges are found true, and Myers could be ordered to return ill-gotten gains to clients, plus interest. Separate proceedings also could be held on whether Myers should face a suspension or ban from the industry.

At its height in 2010, MiddleCove managed $129 million in assets, according to the SEC, and the firm had about 350 clients a year ago. The company claimed only $63 million in assets earlier this year.

l.howard@theday.com