Six former NFL players are proceeding with a lawsuit against the league and its players union despite the recent death of African American hedge fund manager Kirk Wright, who committed suicide last month in jail where he was awaiting sentencing. In 2006, Wright, 37, had been found guilty on 47 counts of mail fraud, securities fraud, and money laundering.
The founder of Atlanta, Georgia-based International Management Associates (IMA) faced up to 710 years in prison and a fine of up to $16 million. IMA offered seven separate hedge funds from 1997 through early 2006 with more than $150 million in investments, and had offices in New York, Los Angeles, and Las Vegas.
“The lawsuit is moving forward,” says attorney Marlon E. Kimpson of Motley Rice L.L.C., which is handling the NFL players” case. “The point of the lawsuit is to make sure what happened does not happen again.”
The players, most formerly of the Denver Broncos, lost more than $20 million in an investment scheme led by Wright. The pro athletes claim Wright was endorsed by the NFL players union and its registered financial advisers program, despite liens against him.
According to the prosecution, Wright reported balances in client accounts that were far greater than what actually existed and diverted investor’s money for personal expenditures, including cash for himself and family members, jewelry, house renovations, a $500,000 wedding, up to six luxury vehicles, and multiple pieces of real estate, mainly in Atlanta and California. They also found that Wright lost money on every investment he made.
The fraudulent practice of the Harvard-educated hedge fund manager has shed some light on the securities industry and the importance of taking an active interest one”s financial affairs. Financial experts have often cautioned investors to never give a money manager carte blanche over their accounts.
“If it sounds too good to be true, it normally is,” says International Management Associates CEO of Fort Washington, Maryland-based Wealth Building Academy. “Kirk Wright and his associates were partly to blame, however the majority of people that invested with IMA failed to conduct any due diligence.”
According to Vann, who offers wealth building seminars and financial coaching, there are several things you can do to protect yourself from unscrupulous financial advisers. For starters, he offers the following guidance.
Verify investment information. Check any numbers (i.e. over-inflated rates of returns or yields) or financial statements that are provided to make sure they are accurate. Invest in deals where the financial information has been audited by a reputable certified public accounting firm.
Do a background check as you would when hiring anyone. Check out financial advisers and brokers by going to the U.S. Securities and Exchange Commission Website (www.sec.gov). Brokers, investment advisers, and their firms or required to be licensed and/or registered. Also, see if they are members of the Securities Investor Protection Corp. Ask for and check references.
Be knowledgeable about the industry. The best way to ensure your broker or financial adviser