There’s an all-too-familiar undertow sweeping through the world of finance – a rogue wave of fraud and illegal activity. At the center of it, Darryl Cohen, a former broker with the prestigious firm Morgan Stanley, now facing extensive FINRA violations and charges of significant misappropriation from multiple NBA player accounts. The drama unfolds.
Who is Darryl Cohen?
Darryl Cohen’s online presence sputters circle warnings and disclaims, stamping the mark of a man in controversy. He has had a turbulent career fraught with customer disputes, regulatory matters, an SEC action, and an eventual termination from Morgan Stanley. His story serves as a stark reminder of the necessity for caution and diligence when choosing a broker.
Breaking the Barrier of Trust
The most alarming claim comes via the U.S Securities & Exchange Commission (SEC). In a filed document dated March 2023, they accused Cohen of breaching fiduciary duties. It alleges he defrauded three former NBA players and misappropriated at least $1 million from their accounts. As a penalty, the suit seeks disgorgement and monetary punishments. It’s a hard blow, considering these players placed their trust and their finances in the hands of Cohen, only to allegedly have it stolen.
FINRA, which stands for Financial Industry Regulatory Authority, distributes licenses to stockbrokers and supervises brokerage firms. They demand strict reporting of customer disputes and complaints. In February 2022, they permanently barred Cohen from the securities industry. He had failed to respond to numerous rule 8210 requests seeking documents and information regarding suspected misuse of customer funds.
Embroiled in Customer Disputes
During 2021, Cohen was implicated in a series of cases lodged by disgruntled Morgan Stanley Smith Barney customers. They claimed Cohen had encouraged them to use a liquidity access line for assets such as real estate and life insurance policies – holdings they claim they had no interest in. There were allegations of unauthorized payments and unsuitable recommendations for outside business investments – dramatically affecting the clients. The FINRA cases that followed show stinging settlements:
- FINRA case#21-02498 – Settled for $1,575,000
- FINRA case #21-01033 – Settled for $32,000
- FINRA case #21-00822 – Settled for $1,700,000
- FINRA case #21-00110 – Settled for $2,500,000
- FINRA case #20-1648 – Settled for $125,000
- NASD case 01-5581- awarded $81,851 to the customer
These settlements paint a picture of a man potentially manipulating his customers’ trust and their financials. Allegedly, of course.
Eventually, in March 2021, Morgan Stanley Smith Barney terminated Cohen’s employment due to his alleged facilitation of undisclosed client businesses and transactions. Cohen’s story is a stark reminder that trust, transparency, and adherence to the rules of practice are non-negotiable in the finance industry.
Any investors who may have been unfortunate enough to suffer losses with Darryl Cohen could be entitled to damages through FINRA arbitration. It’s crucial to keep an eye on your broker’s actions and, if suspicious, seek appropriate legal advice.