A number of former professional athletes have been accused of parlaying their hero/celebrity status and the credibility built on their names to commit securities fraud. According to USA Today, the adulation of celebrities, including sports heroes, in our culture makes high-profile athletes “naturals” for investment fraud.
“Success in too many occupations is more about who you know than what you know. The best talent for selling investments involves getting clients through the front door. Sports stars have a greater opportunity than most to do that,” said Shepherd Smith Edwards and Kantas, LTD, LLP Founder and Stockbroker Fraud Lawyer William Shepherd.
Among the famous ex-athletes to be targeted by the US Securities and Exchange Commission over financial fraud allegations is Willie Gault, the former National Football League member of the Chicago Bears. Known as one of the fastest wide receiver ever and for playing a key part in his team’s victory over the New England Patriots during the 1986 Super bowl, Gault was also a former member of the US Olympic team.
As our securities fraud law firm reported on our Stockbroker Fraud Blog at the end of last year, Gault and several others are accused of taking part in a financial scam that defrauded investors of $8 million. The alleged investment scheme involved the inflation of Heart Tronics stock price inflation. Gault had been appointed Heart Tronics co-CEO and company president.
Another athlete who faced SEC charges was Daniel Ruettiger, the ex-Notre Dame football player who was made famous by the movie “Rudy.” Ruettiger allegedly engaged in a pump-and-dump scam with sports drink company Rudy Nutrition, which allegedly generated more than $11 million in illicit profits. He has settled the SEC accusations by agreeing to pay $382,866.
Other high profile securities cases involving famous athletes include the 2009 SEC case against Triton Financial LLC and investment advisor Kurt B. Barton, who raised over $8.4 million from about 90 investors. Barton retained the services of former NFL football players Ty Detmer and Chris Weinke to get clients to invest in his money laundering scam. He then used the money to fund his expensive lifestyle and contribute to political campaigns. Many of Barton’s victims are Church of Jesus Christ of Latter-Day Saints members. He and Triton have been named in several securities fraud complaints.
According to USA Today, there are several reasons that a famous athlete might become involved in a financial fraud scam, including:
• The desire to keep up a certain standard of living. According to Louis Straney, who is an expert witness from Arbitration Insight, it is not surprising that some athletes who retire do what they can to keep money coming in.
• Investors’ desire to be able to trust their heroes and not be disappointed by them. Many investors will immediately assume that if someone they admire is promoting an investment or product, then it must be legitimate.
• Inexperience on the athlete’s part can prevent him from knowing whether/not he is getting involved in a financial scam.
SEC charges former NFL star Willie Gault, others in fraud, USA Today, December 21, 2012
Ex-NFL Star Willie Gault Sued by SEC in Stock-Pumping Fraud, Bloomberg/Businessweek, December 23, 2011
Daniel ‘Rudy’ Ruettiger accused of fraud by SEC in sports drink case, Chicago Sun-TImes, December 16, 2011
More Blog Posts:
Former-Chicago Bears Wide Receiver Willie Gault Sued by SEC for Securities Scam Involving the Alleged Inflation of Stock Prices, Stockbroker Fraud Blog, December 25, 2011
Daniel “Rudy” Ruettiger Faces SEC Charges Over Pump-and-Dump Scam Involving Sports Drink Company, Stockbroker Fraud Blog, December 19, 2011
Ex-Triton Financial CEO Accused of Using NFL Contacts to Commit $50M Texas Securities Fraud, Stockbroker Fraud Blog, February 17, 2011