SEC Charges Financial Adviser for Misappropriating More Than $1 Million from Current, Former NBA Players

Litigation Release No. 25672 / March 23, 2023

Securities and Exchange Commission v. Darryl M. Cohen, No. 1:23-cv-02453 (S.D.N.Y. filed March 23, 2023)

The Securities and Exchange Commission today charged Darryl Matthew Cohen, a former investment adviser at a large financial institution, with misappropriating more than $1 million from three current and former NBA players over a period of two and a half years.

According to the SEC's complaint, from October 2017 through April 2020, Cohen used client funds, without their understanding or authorization, for personal expenditures 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.

The SEC's complaint, filed in federal district court in the Southern District of New York, charges Cohen with violating Sections 206(1) and (2) of the Investment Advisers Act of 1940. The complaint 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 today announced criminal charges against Cohen.

The SEC's ongoing investigation is being conducted by Payam Danialypour and Manuel Vazquez and supervised by Brent Wilner and Andrew Dean, all of the Asset Management Unit. The litigation will be led by Stephen Kam and supervised by Gary Leung of the Los Angeles Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Financial Industry Regulatory Authority.