Another day, another story about athletes losing their money.
It happens all the time, but today, it’s news that NFL quarterback Mark Sanchez (most famous for the butt-fumble) and MLB pitchers Jake Peavy and Roy Oswalt were defrauded out of $30 million by their investment advisor.
According to MarketWatch:
Ash Narayan, an adviser with the California office of RGT Capital Management, Ltd., diverted the money invested by his athlete clients into a company called The Ticket Reserve Inc., of which he was a board member, according to an SEC lawsuit filed in May and unsealed Tuesday. The funds, allegedly used without the players’ knowledge, was the only thing keeping the company afloat.
The lawsuit says that Narayan and Ticket Reserve CEO Richard M. Harmon and COO John A. Kaptrosky “further attempted to conceal the scheme by creating fraudulent documents — sometimes backdated — and by making Ponzi-like payments in order to hide [the company’s] huge losses from Narayan’s clients.”
The total theft was $33 million, but Peavy, Sanchez and Oswalt alone accounted for $30 million total.
The Wall Street Journal reports that the athletes “came to trust [Narayan] as he described his devout Christian faith and charitable work over the years,” and believed he would use their money in “conservative, low-risk investments.”
How Does This Happen?
First off, this sucks. Big time. I can’t imagine losing that type of money, or finding out that someone you trusted to manage your money was doing the exact opposite.
When Bernie Madoff was exposed as a fraud, billions of dollars were stolen and scores of people and institutions were negatively affected — in the height of the financial recession.
I’m about to wade into treacherous waters, but stick with me. First off, clearly the “financial advisors” are the criminals here, and the athletes are the victims. In no way whatsoever am I denying that fact.
But I wonder – how much responsibility should these athletes (and others defrauded in Ponzi schemes) bare for the results? So much of the sports and entertainment world revolves around “having a guy” … and that’s exactly the wrong way to handle it.
Could these athletes have been more involved in managing their money? Could they have made sure that their money was being invested in clearly aboveboard ways?
I don’t blame the athletes for this, but it simply goes to show that you have to know more about what your money is doing — especially if you’re a wealthy, high-risk target like a celebrity or athlete.