Securities Lawyers Blog
Certain groups have been particularly vulnerable to advisors who engage in investment fraud. Among those groups well known are senior citizens who may have diminished capacity. Another group that serves as a common target are affinity frauds. In an affinity fraud the scammer preys upon members of a group or community such as members of certain religions or ethnic communities.
However, lessor known common victims of investment fraud schemes are professional athletes. Athletes are often preyed upon by bad advisors because they possess attributes that tend to allow the advisor to take advantage of their client. Athletes tend to be unsophisticated in the area of securities and investing often never having previous investment experience prior to going pro. In addition, athletes have busy schedules and demands on their time that do not allow the athlete to closely monitor or investigate each recommendation being made to them. Accordingly, athletes tend to place their trust in their professional advisor that they know what they are doing. Finally, athletes represent large, multi-million dollar opportunities to fraudsters.
In a recent OnWallStreet article, the unfortunate tales of several athletes were told. Among those athletes whose story were mentioned was Doug Mirabelli who recently won his arbitration dispute with Merrill Lynch where the firm was ordered to pay more than $1.2 million. The award came after Mirabelli and his wife claimed that their income portfolio, comprised of equities pledged against Merrill Lynch-owned mortgages, suffered losses that caused a liquidation. Their financial advisor Phil Scott was accused of providing “inappropriate investment advice” for securities including investments in Alliance Resource Partners, Apollo Investment Corp. and Copano Energy LLC.