The Bairs Foundation offers plaintiffs a low-interest alternative when they are in need of financial help during litigation. We developed this fair model in response to the predatory lending practices that for-profit companies are unfortunately infamous for. Recently, another player in the industry has answered for its deceptive practices that preyed on a particularly vulnerable group of people.
The Securities and Exchange Commission has charged investment adviser firm Cambridge Capital Group Advisors and two former principals with defrauding retired NFL players who are suffering from brain injuries. Cambridge Capital Group Advisors, its president Phillip Howard (who represented retired players in the NFL class action), and former investment adviser Don Reinhard allegedly defrauded 20 former players by soliciting more than $4 million from them to invest in two hedge funds managed by Cambridge and operating out of Howard’s law offices. About half of the players who invested had pulled the money from their 401(k) accounts.
What is defrauding?
To defraud is to illegally obtain money from another party through deception.
The SEC’s complaint alleges that although Howard and Reinhard said that they would invest the funds in a variety of ways, they instead used the investors’ money almost entirely to provide settlement advances to other former pro football players whom Howard represents in the NFL class-action litigation. The complaint also alleges that Reinhard and Howard used about 20 percent to pay themselves “broker fees” and pay for Howard’s personal home mortgages.
Noting Reinhard as an “extremely successful investment manager,” Cambridge had failed to mention that he served jail time for bankruptcy and tax fraud and was barred by the SEC from working for any investment adviser firm.
The SEC has charged the three defendants with violating the anti-fraud provisions of federal securities laws.
The idea that someone would prey on vulnerable plaintiffs who are suffering with brain injuries is despicable. Perhaps this and other recent actions against for-profit financial firms will promote more consumer protection and scrutiny of industry standards.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).