Former Morgan Stanley Advisor Convicted of Defrauding NBA Players
A former Morgan Stanley investment advisor, Darryl Cohen, was found guilty by a jury in Manhattan on two counts following a monthlong trial. He faces a maximum sentence of 20 years in prison for defrauding three professional basketball players out of millions of dollars.
Players Testify Against Cohen
The former clients of Cohen, including Portland Trail Blazers guard Jrue Holiday and former players Chandler Parsons and Courtney Lee, took the stand against him at trial. They testified that Cohen persuaded them to buy viatical life insurance policies at massive markups and make other fraudulent payments.
According to the players, Cohen instructed them to buy the policies from a law firm controlled by him and an independent financial adviser, Brian Gilder. Prosecutors revealed that the policies were bought from a broker and then sold to Cohen’s clients at three or four times the purchase price, with markups ranging from hundreds of thousands to millions of dollars.
Unauthorized Transfers and Allegations
Cohen was also charged with transferring without authorization funds from the players’ accounts to various entities, including a nonprofit basketball organization and a disgruntled former professional baseball player. The defense argued that Cohen was being scapegoated for misconduct committed by Gilder and Parsons.
The defense claimed that some of the transfers Cohen made were on behalf of Parsons, who allegedly sought to conceal his involvement with a sports agency in violation of NBA rules. Despite the allegations, Parsons knew the consequences of his actions and proceeded with his agency, leading to a complex legal battle.
Morgan Stanley’s Response
Cohen joined Morgan Stanley in 2015 but was terminated almost six years ago for engaging in undisclosed outside transactions and using an unapproved platform for client communications. The company stated that they have cooperated fully and resolved all client claims related to the fraudulent transactions associated with Cohen.
Before his tenure at Morgan Stanley, Cohen had a 12-year career as an adviser at Wells Fargo and had previously worked at Merrill Lynch, according to Financial Industry Regulatory Authority records.
For more details on the case, you can read the full article here.
