Recent High-Profile Securities Fraud Cases Highlight Risks to Investors

From professional athletes to everyday individuals, people from all walks of life need to be wary of the risks they can face when trusting other people to manage their investments. Three recent high-profile securities fraud cases highlight some of these risks, and should serve as cautionary tales to individual investors.

NBA Star Tim Duncan Sues Financial Advisor for Losses Exceeding $20 Million

Earlier this year, NBA star Tim Duncan filed a lawsuit against his long-time financial advisor. At the heart of Duncan’s claims are more than $20 million in losses that he alleges are the direct result of bad investment decisions that his financial advisor made on his behalf. Duncan’s lawsuit asserts that his advisor’s fraudulent conduct included:

• Making unsuitable investments
• Forging Duncan’s signature and making unauthorized investments
• Engaging in conflict-of-interest transactions by placing his own interests above those of his client

With regard to the conflict-of-interest transactions, the lawsuit alleges that Duncan’s advisor invested in businesses, hotels and wineries owned either partially or entirely by the advisor. Duncan’s claims involve investments made over the course of 20 years. As this case demonstrates, investors need to be cautious in choosing the people who they trust with their money, and need to remain vigilant in monitoring their accounts.

Former NFL Player Faces Charges of Securities Fraud

A former NFL football player and his business partner are facing securities fraud allegations from federal prosecutors and the Securities and Exchange Commission (SEC). The criminal and civil cases allege that William Allen, Susan Daub and their company, Capital Financial Partners, ran a Ponzi scheme under the guise of establishing a pool of funds to be used for loans to professional athletes.

According to the SEC, Allen and Daub raised more than $32 million from at least 40 individual investors, and then siphoned off millions for their own personal gain. The SEC also alleges that Allen and Daub used later investors’ funds to pay off earlier investors – the hallmark of an illegal Ponzi scheme. Allen and Daub dispute the SEC’s allegations.

SEC Pursues Unregistered Brokers Involved with EB-5 Immigrant Investor Program

In June, the SEC filed its first-ever charges against investment brokers under the government’s EB-5 Immigrant Investor Program. The EB-5 Immigrant Investor Program offers opportunities for foreign citizens to obtain green cards by investing in U.S. businesses and “regional centers.”

In its filings against Ireeco LLC and Ireeco Limited, the SEC charges that the companies operated as unregistered brokers for more than 150 foreign investors. They also allegedly funneled the majority of the investors’ funds to regional centers paid them substantial commissions. Without admitting or denying the SEC’s allegations, Ireeco LLC and Ireeco Limited have agreed to submit to administrative proceedings and cease and desist from similar unregistered broker activity in the future.

Are You a Victim of Investment Fraud? Let a Securities Fraud Attorney Help

Zamansky LLC provides legal representation for victims of securities and other forms of investment fraud throughout the country. Located in the heart of Wall Street, our firm has successfully recovered millions of dollars for victims of fraudulent investment losses. If you have suffered unexpected losses and believe that you may be a victim of securities fraud, we encourage you to contact us as soon as possible for a free consultation.