- Allegation
- Resolved
- Finding
SEC Charges Darren J. Caris Over Alleged Cherry-Picking Scheme
The SEC alleges Caris and his firm also made false and misleading statements to clients about trade allocations, conflicts of interest and a move to a different custodian.
The US Securities and Exchange Commission charged investment adviser Darren J. Caris and his advisory firm, Caris Investment Partners, Inc., with allegedly defrauding clients through a cherry-picking scheme, the SEC said in a litigation release dated Oct. 8.
The SEC's complaint was filed Oct. 6 in the US District Court for the Southern District of California, according to the release, which says the firm is based in Encinitas, California. According to the complaint, from December 2023 to April 2024, Caris used his firm's block trading account to place trades and later in the day "disproportionately allocate profitable trades to his personal account and unprofitable trades to some of his clients' accounts."
The complaint also alleges that Caris and the firm made false and misleading statements to clients and prospective clients. According to the release, those statements concerned the allocation of trades, the management of conflicts of interest relating to Caris's own personal trading, and the move to a different broker-dealer custodian.
The SEC charges Caris and Caris Investment Partners with violating the antifraud provisions of the Securities Act, the Securities and Exchange Act and the Investment Advisers Act, according to the release. The agency seeks permanent injunctions, disgorgement with prejudgment interest and civil penalties.
The investigation was conducted by staff in the SEC's Los Angeles Regional Office, the release says.