With average contracts in the multimillion-dollar range, professional athletes are always targets for monetary exploitation. It appears that various NFL and NBA players are the latest to fall into this unfortunate trend, reportedly being involved in an $18 million scam.
According to Rand Getlin of Yahoo! Sports, the Federal Industry Regulatory Authority is now looking into the investments that were sold to players in these two professional sports leagues:
According to multiple sources that spoke to Yahoo! Sports on the condition of anonymity, several professional athletes have either been contacted or been urged to contact investigators from the U.S. Department of Justice, the FBI and the U.S. Securities and Exchange Commission.
Three sources also told Yahoo! Sports that the NFL Players Association has asked a handful of its athletes with investments tied to Jade Management to contact FBI investigators.
The report states that Success Trade Securities sold fraudulent investments to athletes with a promise of a high rate of return.
In a previous article, Getlin states that most affected players were represented by Jade Private Wealth Management. This group represented a wide variety of clients that includes NFL stars Vernon Davis, Joe Haden and Clinton Portis, as well as Brandon Knight of the NBA's Detroit Pistons.
The government is now accusing the firm of "misrepresenting and/or failing to disclose their inability to make interest payments to existing note-holders without raising additional capital from new investors."
In layman's terms, Success Trade allegedly lied about the ability to provide its clients with the money it said it would.
Now, the investigating authorities are looking for more players to step forward with information in order build a stronger case against the company.
The founder of Jade Management, Jinesh Brahmbhatt, told Yahoo! Sports that he had "more than 30 clients who had purchased around $12 million worth of the fraudulent notes from Success Trade," but maintained Jade's innocence:
"I just hope nobody says, 'the guys at Jade capitalized on this,' " Brahmbhatt said. "Because we never did. Other than the first year we took [$1.25 million] from him [Success Trade CEO Fuad Ahmed]…everything we did for him is because we actually liked it."
Brahmbhatt contended that he had no reason to believe Success Trade was acting improperly while drawing investor money, but added that he didn't have full knowledge of the company's financial practices.
As athletes continue to look for ways to invest their incredible salaries, it appears that there are even fewer people they can trust to act in their best interest.
Like the new article format? Send us feedback!