NFL Players Sue BB&T Bank for $53 Million in Investment Losses
Several current and former NFL players have filed suit against North Carolina bank BB&T , claiming they were scammed out of $53 million in investments. The 16 current and former players, including future Hall of Famer Ray Lewis of the Baltimore Ravens, two-time Pro Bowler Clinton Portis, and "The Freak" Jevon Kearse, represent fewer than half of the total number of players who invested in what turned out to be an illegal Alabama casino.
The story raises the question, how can those with so much money can have no idea where their cash is flowing until it's gone?
The group -- which also includes Brandon Meriweather, Santonio Holmes, Frank Gore, Fred Taylor, Jacob Bell, Greg Jones, Gerard Warren, Jamal Anderson, Tavares Gooden, Santana Moss, Lito Sheppard, Jabar Gaffney, and Kenard Lang -- is being represented by attorney Andrew Kagan, who says the players allege Jeff Rubin, a now banned financial advisor, is responsible for making investments without the players' knowledge. The lawsuit was filed in the U.S. District Court in Fort Lauderdale, Fla., after two years of research and preparation.
According to a statement from Kagan made to Yahoo! Sports, "BB&T ignored plenty of red flags and allowed tens of millions of dollars to be transferred from clients' accounts without their knowledge or permission." He went on to say that the bank's negligence in this regard has caused "irreparable harm" to the players, indicating some have been "left with nothing" as a result.
And these definitely don't seem to be inflated claims: Moss, Kearse, and Portis lost their homes in foreclosures due to funds being illegally removed from their bank accounts with BankAtlantic.
BB&T was tight-lipped about these allegations and largely passed the blame, with David R. White, vice president of corporate communications, stating, "this case concerns actions taken by BankAtlantic prior to its acquisition by BB&T in 2012."
At the center of the litigation is Jeff Rubin, a former financial advisor who has been banned by regulators for life since his previous investments resulted in the loss of millions of dollars for another set of NFL athletes, most notably Terrell Owens.
At one time, Rubin represented more than 100 athletes across multiple sports. In fact, he used to run a concierge financial services firm called Pro Sports Financial. It was under this firm's name he invested approximately $43.6 million into Center Stage, a supposed entertainment complex in Alabama that turned out to have an illegal casino in it. Boxer Floyd Mayweather sued Rubin in 2012 for $4 million.
Breaking it down
So here are the technical bits: BT&T is being accused of negligence, breach of contract, aiding and abetting, and breach of fiduciary duty. Basically, the athletes are claiming the then-named BankAtlantic allowed Rubin to open up new accounts with documents that contained forged signatures of the NFL stars. Kagan believes the bank didn't do their due diligence because Rubin was dealing with such large sums of cash. Plus, the bank allegedly didn't notify the players when Rubin made funds transfers into these faulty or fraudulent investments.
Some evidence has been revealed to the press that seems to substantiate the group of NFL players' side of the story. An image obtained by CBS Baltimore shows two sets of signatures -- one featuring the real signatures of athletes like Ray Lewis, and the other showing forgeries. And they do look pretty fake; Kagan wasn't off base when he said anyone could look at them and "tell they were forged."
This is a shame, of course. But again, how can so much money leave your bank account without you noticing? Is this a problem shared by all people with millions to invest or just a glaring oversight on the part of the football players? Did no one, you know, login into their online banking system and go, "Umm, where's my money?"
First reports indicated the amount of missing cash was $60 million, but additional research conducted by the National Football Post shows 49ers running back, Frank Gore lost $1.6 million, not $8.7 million like was initially thought, dropping the total suable sum to $53 million.
Still, when you factor in all the athletes who filed suit against Rubin in previous years, the amount of money he mishandled or tied up in scams is estimated to be around $100 million, according to Kagan.
What remains to be seen is how much the players knew or didn't know about where their money was being invested. It's all hearsay at this point. While the images of allegedly forged signatures is fairly compelling, what isn't so clear is what sort of authority over their accounts the players gave Rubin prior to his making investments.
Obviously if it turns out they didn't know a thing about it, the players are deserving of compensatory damages and maybe a quick course in personal banking. If they did have some knowledge, bad investments are bad investments and not necessarily criminal, the Alabama casino notwithstanding.
At this point, what we know for certain is how important it is to have a handle on your full investment portfolio. Even if you're not handling the money yourself, you need to have a full view of what's happening with your funds. Signing over the authority to have your investments fully managed by another party is a bad idea. Period.
A better idea than investing in illegal casinos
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
The article NFL Players Sue BB&T Bank for $53 Million in Investment Losses originally appeared on Fool.com.Fool contributor Brenda Barron has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.