Former NBA Players Chandler Parsons and Courtney Lee Reportedly File a $5 Million Securities Arbitration Claim Against Morgan Stanley and Broker Darryl Cohen

Professional basketball players Chandler Parsons and Courtney Lee, who have both played in the National Basketball Association, have reportedly filed a $5 million securities arbitration complaint against Morgan Stanley.  According to broker Darryl Cohen’s CRD report, the complaint alleges that Morgan Stanley made payments from the players’ accounts without prior approval.  The complaint also alleges that Mr. Cohen recommended the use of a “liquidity access line” for real estate and life insurance policies for which they “now claim they hold no interest.”

Parsons and Lee were not the first professional athlete to file a claim against Morgan Stanley arising out of broker Darryl Cohen’s conduct.   Former Major League Baseball outfielder Nyjer Morgan filed a securities arbitration complaint against Morgan Stanley in May 2020.  The complaint alleged that Mr. Cohen unsuitably recommended using a liquidity access line” to loan funds to outside business entities.

If you have lost money with broker Darryl Cohen or Morgan Stanley, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Morgan Stanley’s Global Sports and Entertainment Group

Mr. Cohen is one of the firm’s Global Sports and Entertainment Directors.  The Global Sports and Entertainment Group is a division of Morgan Stanley that targets professional athletes and entertainers.  According to public records, the Global Sports and Entertainment Group has received six customer complaints over the past year.  Click here to read more about the recent customer disputes.

Another broker in Morgan Stanley’s Global Sports and Entertainment Group, Mark Mann (CRD No. 5734553), has also received a customer complaint related to a “liquidity access line.”  The securities arbitration complaint, filed in February 2020, alleges that Mr. Mann did not disclose the prepayment penalty associated with his liquidity access line.  The arbitration dispute is pending. Mr. Mann works in Morgan Stanly’s branch office in Cincinnati, Ohio.

Liquidity Access Line

According to Morgan Stanley’s marketing materials, a liquidity access line is a line of credit.  Eligible securities in a customer’s investment accounts are used as collateral for the line of credit.   The borrowed funds can be used for almost any purpose other than purchasing securities in the Morgan Stanley investment account.

Borrowing against securities is not suitable for everyone.  When Morgan Stanly recommends that a customer use a liquidity access line, that recommendation must be in the client’s best interest. Morgan Stanley also has a duty to accurately disclose all material facts and risks associated with the use of its liquidity access line.

Financial Advisor Darryl Cohen (CRD No. 2786613)

Mr. Cohen has 23 years of experience in the securities industry.  He joined Morgan Stanley in 2015 after spending 12 years of his career at Wells Fargo.  He started his career in the industry at Merrill Lynch.

Mr. Cohen has been the subject of at least six customer disputes.  The dispute with Mr. Parsons and Mr. Lee and the dispute with Mr. Morgan are still pending.

In 2001, an arbitration panel awarded a customer $81,851 in damages, plus interest.  The customer alleged negligence, suitability, misrepresentation, fraud, unauthorized trading, breach of fiduciary duties, breach of contract, breach of implied covenant, and breach of good faith and fair dealing.

In 2010, a customer alleged that Mr. Cohen made an unauthorized journal transfer from his account to another customer.  The dispute was settled by Wells Fargo, which employed Mr. Cohen when the conduct occurred.

The Cohen Group

Mr. Cohen conducts business as part of The Cohen Group, which targets high net worth individuals, professional athletes, entertainers, and business owners.  Mr. Cohen’s father, Marc Cohen, is also a member of the team, as well as financial advisor Spencer Torgan.  The team, based out of Westlake Village, CA, reportedly manages $656 million in client assets with a minimum account size of $1 million.

Marc Cohen (CRD No. 50025) has 48 years of experience in the securities industry and has worked at Merrill Lynch and Wells Fargo before joining Morgan Stanley in 2015.

Spencer Torgan (CRD No. 4976816) has 15 years of experience as a broker. Like the Cohens, he also joined Morgan Stanley in 2015, moving over from Wells Fargo. In 2016, Mr. Torgan was the subject of a customer complaint that resulted in a settlement.  The customer alleged that she was put into a fee-based advisor program and not given the option to pay commissions associated with individual trades.  The conduct that gave rise to the complaint occurred while Wells Fargo employed Mr. Torgan.

Morgan Stanley – Supervisory Duties

Brokerage firms like Morgan Stanley must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations.   When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you or a client were a customer of Darryl Cohen, The Cohen Group, or Morgan Stanley’s Global Sports and Entertainment Group and either sustained financial losses or suspect that Morgan Stanley did not have your best interest in mind when recommending investments or transactions, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP.  August Iorio can be reached at or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY.   Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

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