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Written by 2:11 pm Blog, Current Investigations

SEC Alleges Darryl Matthew Cohen Stole $1 Million from Clients 

SEC Alleges Darryl Matthew Cohen Stole $1 Million from Clients, feautured by top securities fraud attorneys, the White Law Group

Darryl Matthew Cohen, ex-Morgan Stanley Advisor Allegedly Defrauded NBA Players

According to a press release, the Securities and Exchange Commission today filed charges against Darryl Matthew Cohen, a former investment adviser with Morgan Stanley, with allegedly misappropriating more than $1 million from three current and former NBA players over a period of two and a half years. This follows Morgan Stanley lawsuits reportedly filed last year by two of the players looking to recoup their losses.

From October 2017 through April 2020, Cohen allegedly used client funds, without their knowing, for personal expenses including to support his son’s amateur basketball program, for a home gym, and to pay back another client whose funds Cohen had misappropriated. Cohen also allegedly sold life insurance settlements to the clients for kickbacks to fund his home improvements.

FINRA Bars Darryl Matthew Cohen from Securities Industry

In December 2021, FINRA reportedly barred Cohen from associating with any FINRA member firm in any capacity for his failure to respond fully and completely to cooperate with their investigation. Cohen was reportedly affiliated with Morgan Stanley in West Lake Village California from 2015 until April 2021 when he was reportedly dismissed. According to his FINRA broker report, he has 9 customer complaints on his record. Allegations include unauthorized transactions and unapproved outside business activities, among others.

The SEC alleged that Cohen knowingly or recklessly defrauded his advisory clients.  Cohen purportedly stole and misappropriated funds from three of his advisory clients for unauthorized purposes.

First, he purportedly withdrew funds from two of his clients’ brokerage accounts and diverted those funds into the organization Beast Basketball for his benefit. Second, he allegedly withdrew his client’s funds without his knowledge. Finally, he purportedly misappropriated funds that his clients invested in the life settlements.

The SEC seeks permanent injunctive relief, disgorgement and prejudgment interest, and a civil penalty. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Cohen.

Brokers and brokerage firms owe a duty of care and loyalty to their customers. The broker must use the standard of care and diligence needed to protect the customer’s interest. Failure to fulfill that duty may constitute negligence or malpractice by a broker. The duty of loyalty requires that the broker refrain from self-dealing and place the interests of the customer first.

FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional.  It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.

FINRA Attorneys for Securities Disputes

If you have suffered losses investing with Darryl Matthew Cohen, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.

With over 40 years of securities law experience, including experience working at FINRA and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.    For more information, please visit our website, www.whitesecuritieslaw.com.




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