The Securities and Exchange Commission (SEC) has filed a civil lawsuit against John Sterling Myers, Sterling Capital, LLC, and Sterling Capital Management, LLC (SCM), alleging a multi-year scheme to misappropriate investor funds and falsify investment performance. The complaint was submitted on June 5, 2026, in the U.S. District Court for the Northern District of Illinois.
According to the SEC, Myers operated a pooled investment vehicle, Sterling Capital Investments, LLC (the Fund), beginning in 2022 through Sterling Capital and SCM. He allegedly marketed the Fund as a "premier" and "exclusive investment pool" and raised approximately $4 million from about 28 investors over several years. Investors reportedly included family, friends, and others in approximately five states, including Illinois.
The complaint alleges that, without investors' knowledge, Myers repeatedly depleted Fund assets through unsuccessful trading and personal spending. As of the end of 2025, the defendants had repaid investors only about $398,000, leaving more than $3.6 million of investor money gone, according to the SEC.
Alleged Misrepresentations and Fabricated Statements
The SEC claims that from January 2022 through at least July 2025, Myers offered and sold limited liability interests in the Fund while touting his prior experience as an investment banker on Wall Street and his purported personal success trading securities. He allegedly assured investors that the Fund had outperformed the S&P 500 and that their individual interests had grown in value.
In reality, Myers regularly lost money trading and misappropriated at least $1.8 million by diverting Fund assets to his personal financial accounts, the SEC alleges. Through those accounts, he is said to have engaged in further unsuccessful trading and paid various personal expenses. To conceal the Fund’s actual performance, Myers allegedly sent investors fabricated quarterly account statements showing accumulated net gains and positive returns exceeding those of the S&P 500. On an annual basis, these statements purported to show investment returns ranging from 16% to 54%, depending on the investor.
Inflated NAV and Tax Reporting Issues
According to the complaint, Myers generated the sham account statements from internal spreadsheets used to calculate the Fund’s net asset value (NAV) and investor capital account balances. He allegedly inflated the NAV by including assets the Fund did not own, such as his father-in-law’s home and retirement accounts. To offset mounting trading losses, Myers also purportedly recorded his hypothetical future income as a million-dollar Fund asset, despite not having earned any income for many years.
The SEC further alleges that Myers failed to issue tax forms to investors as required by the Fund’s offering documents, which should have disclosed their distributive share of the Fund’s losses. Instead, he allegedly claimed all trading losses on his personal tax returns without informing Fund investors. When some investors requested redemption of their investments at the values shown on their account statements, Myers allegedly failed to pay them, offering various excuses without revealing that he had misused and lost their money.
Alleged Violations and Sought Remedies
Myers is alleged to have solely owned and controlled both Sterling Capital and SCM and to have directed all Fund activities through these entities. The SEC accuses the defendants of violating the antifraud provisions of the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, Section 17(a) of the Securities Act of 1933, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8.
The Commission is seeking injunctive relief, disgorgement of ill-gotten gains, pre-judgment interest, civil penalties, and all other equitable and ancillary relief.
