The Securities and Exchange Commission (“SEC”) recently charged a Florida-based investment adviser firm and its principals with defrauding investors who have mostly retired NFL players who were part of a class-action suit against the NFL relating to concussion-related brain injuries. The SEC complaint charges Cambridge Capital Group Advisors, LLC (f/k/a Cambridge Capital Advisors, LLC), its president Phillip Timothy Howard, who was a Florida attorney representing the retired players in the class action lawsuit, and Don Warner Reinhard, a former registered investment adviser previously barred by the SEC. Howard and Reinhard allegedly raised $4 million from the retired NFL players, about half of whom rolled over their NFL 401(k) accounts into hedge funds run by the defendants.
According to the SEC complaint, the defendants defrauded 20 investors in two proprietary hedge funds operating out of Howard’s law offices by representing that the hedge funds would invest in a variety of instruments.
However, unbeknownst to investors, the funds were almost exclusively invested in settlement advance loans to more than 70 of Howard’s NFL class-action clients. The SEC alleges that the defendants promoted Reinhard as an “extremely successful investment manager,” while concealing that he served jail time for bankruptcy and tax fraud, and had been barred by the SEC from working for any investment adviser firm. Additionally, the complaint alleges that Howard borrowed $612,000 in undisclosed personal mortgage loans from the funds, which he never repaid and that Howard and Reinhard used investor funds to pay themselves fabricated “broker fees” on settlement advance loans to Howard’s legal clients.
Most egregiously, the victims of this alleged fraud allegedly sought the advice of Howard, their attorney, as concussion victims and were particularly vulnerable. Many rolled over their retirement money to make their investments into the funds. Professional athletes are often the victims of financial scams. If you or someone you know has been the subject of a financial fraud any other type of investment fraud, we may be able to help. Call us today for a free consultation. Former Wall Street Attorney Melanie S. Cherdack represents investors in the United States and the Caribbean in claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-768-2499 or complete our contact form for a free consultation.