Slideshow Cautionary Tales: Pro Athletes who Sued Their Advisor

  • July 11 2013, 2:06pm EDT
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<b>Mike Tyson</b>

In February of this year, Mike Tyson and his wife, Lakiha Tysyon, sued Live Nation Entertainment and its subsidiary SFX Financial Advisory Management Enterprises, their former advisor, Brian Ourand, and several others for breach of fiduciary duty, fraud and unjust enrichment. The Tysons said that their advisor and his firm stole $300,000 and caused some $5 million in damages from lost opportunities.

TOTAL: $5 million+

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<b> Denny Neagle</b>

Former MLB pitcher Denny Neagle and his ex-wife Jennifer Neagle filed suit last year in Illinois Circuit Court claiming that their financial advisor, William S. Leavitt, and Leavitt Capital Management invested their money in risky and illiquid assets including hedge funds, private equity funds and other products without their knowledge. The complaint said that 80% of the portfolio was in “alternative” investments, but did not specify the amount being sought.
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<b>Doug Mirabelli</b>

Former Major League Baseball player Doug Mirabelli and his wife, Kristin Mirabelli, hit a home run in an arbitration dispute with Merrill Lynch last year when a panel ordered the firm to pay the couple more than $1.2 million.
The award came after the couple claimed that their income portfolio, comprised of equities pledged against Merrill Lynch-owned mortgages, suffered losses that resulted in their liquidation in late 2008.

In the case summary, the claim named financial advisor Phil Scott for providing “inappropriate investment advice” for securities including Alliance Resource Partners, Apollo Investment Corp. and Copano Energy LLC. Scott was not named as a respondent in the case.

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<b>Horace Grant</b>

A FINRA arbitration panel ordered Morgan Keegan to pay at least $1.59 million to former Los Angeles Lakers basketball star Horace Grant in 2009. The award stemmed from losses that he sustained from mortgage-based bond funds. Grant said that Morgan Keegan failed to disclose the full risks involved. As recently as a January of this year, Grant made headlines when his lawyer claimed Morgan Keegan still owed his client another $333,000 in interest.

Grants case was one of several investors who brought a case against Morgan Keegan over a family of bond funds that went suffered heavy losses in the 2008 crisis. Raymond James bought Morgan Keegan in April of last year and was indemnified of the litigation surrounding those funds.

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<b>Kyle Orton</b>

Kyle Orton, an NFL player with the Chicago Bears, sued his Chicago law firm in December 2011 on the grounds that he and other investors lost millions after investing in partnerships that did not provide the anticipated tax benefits. Orton accused Chuhak & Tecson PC of misrepresentation and negligence over advice on investments in oil and gas partnerships. Orton is currently with the Dallas Cowboys.
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<b>Success Trade Securities</b>

In April, FINRA filed a temporary cease-and-desist order against Success Trade Securities and its CEO Fuad Ahmed. “Ahmed and other registered representatives at the firm sold more than $18 million in Success Trade promissory notes to 58 investors, many of whom are current or former NFL and NBA players, while misrepresenting or omitting material facts. Specifically, FINRA's complaint alleges that Ahmed and Success Trade Securities misrepresented that they were raising $5 million through the sale of promissory notes and continued to make this representation, even as the sales exceeded the original offering by more than 300 percent,” FINRA said. The complaint did not name the athletes involved.

<b>Terrell Owens</b>

A six-time Pro Bowl selection, NFL wide receiver Terrell Owens sued his former advisor, Jeff Rubin, and his firm, Pro Sports Financial, earlier this year for mismanaging his accounts, forging signatures and making illegitimate transfers to other accounts, including that of fellow NFL star Jevon Kearse. Among the allegations, Owens said Ruben and others introduced him to illegal and highly risky investments, including a failed casino project in Alabama.
In March of this year, FINRA barred Rubin and his firm from the securities industry for making unsuitable recommendations in highly risky, illiquid investments, including the casino.
“This case demonstrates how broker misconduct can target high-income, inexperienced, and vulnerable investors,” Brad Bennet, FINRA executive vice president and chief of enforcement, said in a statement. “Jeffrey Rubin took advantage of professional athletes who placed their trust in him.
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<b>Vince Young</b>

In 2012, the Tennessee Titans and Buffalo Bills quarterback Vince Young who rose to fame playing for the University of Texas filed suit against his former agent in Houston and a financial advisor in North Carolina. Young, who had a $54 million contract when he was signed in the first round draft in 2006, said $5.5 million had gone missing from his accounts and claimed that it was due to fraudulent activity on the part of his advisers.

The agent being sued denied having access to Young’s financial accounts and told the Associated Press he would be filing a counter suit for defamation.

TOTAL: $5.5 million

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<b>Mike Sweeney</b>

Five time MLB all-star Mike Sweeney filed suit in June of this year against his former advisor, Ralph A. Jackson, and UBS for $7.6 million. Sweeney was drafted to the Kansas City Royals out of high school in 1991. He was making $200,000 a year by age 24 and landed multi-million dollar contracts by 2001 and 2002. According to the complaint, his advisor took advantage of his inexperience to invest his money in private equity and start-up companies that later tanked.