SEC Charged Encinitas Advisor With Cherry-Picking
Federal regulators accused Darren J. Caris of favoring his own accounts over those of his clients.
Updated on Oct. 9, 2026 in Financial Crime
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The SEC filed a complaint alleging that Darren J. Caris and Caris Investment Partners engaged in a cherry-picking scheme between December 2023 and April 2024. The firm, which managed $54.6 million in assets, allegedly directed profitable trades to a personal account while offloading losses onto 16 client accounts.
Why it matters
The case highlights regulatory efforts to combat fraudulent trade allocation practices where advisors wait for market outcomes before assigning trades to specific accounts. By allegedly prioritizing personal gain, the advisor violated the fiduciary duties owed to his clients.
The SEC filed its formal complaint against Darren J. Caris on October 6, 2026, seeking to claw back illicit profits and impose permanent industry bans. The agency is currently pursuing civil penalties for the alleged violations.
The players
Darren J. Caris
He is the 55-year-old financial advisor accused by the SEC of executing a fraudulent cherry-picking scheme.
Caris Investment Partners
This is an Encinitas-based investment firm that managed $54.6 million in assets as of 2025.
Securities and Exchange Commission
This federal agency is responsible for protecting investors and maintaining fair, orderly, and efficient markets.
The details
Caris allegedly used a shared block trading account to execute trades and then retroactively assigned winning outcomes to his personal holdings while dumping underperforming assets into client accounts. Following reports from a broker that questioned these allocation patterns, the firm's business relationship with that broker was terminated.
Timeline
December 2023: The alleged cherry-picking scheme began.
March 5, 2024: A specific instance of questionable trade allocation occurred.
April 4, 2024: An employee at Broker A questioned the trade allocation patterns.
April 29, 2024: Broker A notified the firm that their relationship would be terminated.
October 6, 2026: The SEC filed an official complaint against the defendants.
Legal Context
The charges filed by the SEC emphasize the ongoing enforcement of the Investment Advisers Act of 1940 fiduciary standards regarding trade allocation. This case represents a formal enforcement action focused on violations of these long-standing fiduciary requirements.
Local clients of investment firms in Encinitas should monitor their account statements for any irregular trade allocation patterns. Affected clients may be contacted by the SEC as part of the ongoing legal proceedings.
The takeaway
Investors should periodically review their trade confirmations to ensure allocations match their risk profiles and stated investment goals. This case serves as a warning about the importance of transparency in discretionary trading accounts.
Further reading
Learn more about regulatory oversight at the Financial Crime section.
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