The Securities and Exchange Commission has charged Darren J. Caris and his Encinitas, California firm, Caris Investment Partners, with defrauding clients through an alleged "cherry-picking" scheme. The SEC announced the case October 8, 2026. The complaint was filed October 6 in federal court in San Diego. The charges are allegations, and the defendants have not been found liable.
According to the complaint, from December 2023 to April 2024 Caris placed trades through his firm’s block trading account, then later in the day assigned the profitable trades to his own account and the unprofitable ones to some clients. The SEC also alleges Caris and the firm made false or misleading statements to clients and prospects about how trades were allocated, how his personal trading conflicts were managed, and why they moved to a different broker-dealer custodian.
The SEC charges violations of the antifraud provisions of the Securities Act, the Exchange Act and the Investment Advisers Act. It is asking for permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
For people who use an adviser, the practical step is to ask how the firm allocates block trades and whether the adviser trades for his own account.