NFL players are finding themselves abused by brokers with bad investments in Ponzi and other fraudulent schemes.
Hall of Fame Quarterback, John Elway, recently disclosed that he and his partner gave $15 million to a hedge fund manager, who was allegedly running a Ponzi scheme.
New Orleans Saint, Alex Brown, sued his financial advisors over $3.9 million in losses, alleging they had “abused the trust,” including bad investments in airplane hangars.
Broker Mary Wong pleaded guilty to stealing more than $3 million from investors, including Eagles quarterback Michael Vick.
These cases come as the NFL Players Association, the union representing 1,800 players, looks to strengthen the screening process for its financial adviser program, which has come under attack in recent years.
Professional athletes are susceptible to being taken advantage of when it comes to investing their money. They often are unsophisticated investors and have a high net worth.
After adviser William “Tank” Black was convicted of stealing $11 million from players he represented, a program was started that requires advisers have appropriate financial qualifications, such as a certified financial planner mark or FINRA registration to be included on a select list for players.
These advisers must also undergo a background check, and pay $1,500 to be included on the list and $500 annually to remain on it. There are currently about 450 advisers on the list.
Pro athletes are considered targets for investment scams and unscrupulous brokers. Such athletes often place heavy reliance upon their advisors and do not pay attention to, or understand, the details of sophisticated investment products.