Darren J. Caris, an investment adviser based in Encinitas, California, faces SEC fraud charges over a cherry-picking scheme that steered winning trades to his personal account while clients absorbed the losing side. The complaint, filed October 6, 2026 in the U.S. District Court for the Southern District of California, also names his advisory firm, Caris Investment Partners, Inc.
What happened in the Darren Caris SEC case
The SEC alleges that from December 2023 through April 2024, Caris placed trades through his firm’s block trading account and watched how they performed before assigning ownership. Profitable trades went disproportionately to his personal account, according to the complaint. Unprofitable trades landed in client accounts.
Regulators call the practice cherry-picking. The adviser sees the result first and decides ownership second. Clients fund the experiment, and from inside a single account the pattern stays invisible.
The complaint also accuses Caris and Caris Investment Partners of making false and misleading statements to clients and prospective clients. The alleged misstatements covered how trades were allocated, how conflicts of interest around Caris’s personal trading were managed, and the firm’s move to a different broker-dealer custodian.
Charges filed against Caris Investment Partners
The commission charged both defendants under the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5. The complaint adds claims under Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.
The case is docketed as No. 26-civ-5714 in the Southern District of California and announced in Litigation Release No. 26669 on October 8, 2026. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
Case details at a glance
| Item | Detail |
|---|---|
| Defendants | Darren J. Caris and Caris Investment Partners, Inc. |
| Location | Encinitas, California |
| Court | U.S. District Court, Southern District of California |
| Case number | 26-civ-5714, filed October 6, 2026 |
| Alleged conduct | Cherry-picking block trades, false statements, concealed conflicts |
| Alleged scheme window | December 2023 to April 2024 |
| Relief sought | Injunctions, disgorgement, prejudgment interest, civil penalties |
Why cherry-picking is hard for clients to detect
Cherry-picking leaves a statistical fingerprint across an adviser’s book. One account collects steady gains. Another absorbs repeated losses. From inside either account, the results can look like ordinary market noise.
The pattern surfaces only when a regulator compares allocations across every account an adviser controls. By then, the affected client has already paid through forgone returns.
Red flags from the Caris case that apply everywhere
An adviser who trades his personal account in the same securities as clients, at the same time, invites exactly this conflict. Clients should ask when and how trade allocations are decided. An adviser who cannot answer in plain terms has given an answer.
Custodian changes deserve the same scrutiny. The SEC alleges the firm made misleading statements about its transition to a new broker-dealer custodian. A quiet change of custody is worth a phone call.
What investors who worked with Darren Caris can do now
Clients of Caris Investment Partners should gather account statements covering December 2023 through April 2024. Those statements show the allocations the adviser reported, even when the underlying trade tickets remain with the firm.
A securities attorney can compare reported results against market benchmarks for the same period. A persistent gap between an adviser’s results and a client’s results is the heart of a cherry-picking claim.
Adviser disciplinary history is public through the SEC’s Investment Adviser Public Disclosure database. Checking it costs nothing and takes minutes.
Frequently asked questions about the Darren Caris SEC charges
Who is Darren Caris? Darren J. Caris is an investment adviser based in Encinitas, California, and the principal behind Caris Investment Partners, Inc. The SEC charged him and the firm on October 6, 2026.
What does the SEC allege Caris did? The complaint alleges he cherry-picked trades, keeping winners for his personal account and sending losers to clients, then made misleading statements about the practice.
What can Caris Investment Partners clients do about losses? Gather statements from the alleged scheme window and ask a securities attorney to review the allocation results. Time limits govern every recovery path.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis — no recovery, no fee.
Contact Haselkorn & Thibaut today
Time matters in investment fraud cases. The earlier you act, the stronger your position. The firm offers a free case evaluation to assess your losses, review your account history, and explain your options under arbitration or settlement.
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