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Former Morgan Stanley Advisor Faces Trial Over Alleged Scheme Targeting NBA Players

Posted on April 28th, 2026 at 11:43 AM
Former Morgan Stanley Advisor Faces Trial Over Alleged Scheme Targeting NBA Players

From the desk of Jim Eccleston at Ä¢¹½´«Ã½

A former Morgan Stanley financial advisor is charged with defrauding professional basketball players through complex investment transactions involving viatical settlements, according to reporting by InvestmentNews.

Federal prosecutors charged Darryl Cohen in March 2023 with six counts tied to alleged schemes to defraud clients, including several NBA players. InvestmentNews reports that the U.S. Attorney's Office for the Southern District of New York alleges that Cohen exploited his advisory and fiduciary relationships to carry out the misconduct.

According to the indictment, Cohen managed a scheme from 2017 through 2020 that resulted in losses exceeding $5 million for three professional athlete clients. The athletes identified as alleged victims include Jrue Holiday, Chandler Parsons, and Courtney Lee. Prosecutors allege that Cohen promoted viatical settlements, which involve the sale of life insurance policies by individuals with limited life expectancy, at inflated prices without disclosing key conflicts of interest.

The government contends that Cohen and an independent financial planner, Brian Gilder, induced clients to purchase these investments at significant markups, including rates exceeding 200 percent. Prosecutors allege that Gilder controlled the transactions, a fact that Cohen did not disclose to clients.

According to InvestmentNews, authorities also allege that Cohen misused client funds for personal and unrelated purposes. In one instance, he allegedly transferred $500,000 from client accounts under the guise of charitable donations and redirected a portion of those funds to construct athletic training facilities at his home.

InvestmentNews reports that the indictment further claims that Cohen and Gilder used client funds to resolve disputes with another investor, including payments routed through third parties. Prosecutors cite communications between the two as evidence of efforts to address complaints from a prior client.

Gilder has already pleaded guilty to wire fraud conspiracy, according to InvestmentNews. Cohen is contesting the charges.

Cohen worked as a registered representative with Morgan Stanley from 2016 until his termination in 2021, according to InvestmentNews' review of his BrokerCheck record. That same year, FINRA barred him from the securities industry.

Ä¢¹½´«Ã½ LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, investment fraud, securities fraud, broker misconduct, viatical settlements, financial advisor fraud

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