Pro Pitcher Claims Adviser Cost Him $7.5M
PHILADELPHIA (CN) - Retired pro pitcher Jaret Wright sued his financial adviser, claiming he cost him $7.5 million by putting his money into Ponzi schemes from which the adviser got kickbacks.
Jaret Wright sued SunTrust Bank, SunTrust Investment Services, SunTrust Mortgage, CSI Capital Management, Taylor & Faust and Todd LaRocca, in Federal Court.
Wright pitched from 1997 to 2007 for Cleveland, San Diego, Atlanta, the New York Yankees and Baltimore.
He says in the lawsuit that LaRocca approached him in 1997, claiming to specialize in helping athletes maintain their wealth. LaRocca told him he was a very conservative, low-risk financial adviser, as the nature of professional athletes' income is unstable, according to the complaint.
"Contrary to LaRocca's express representation, he also placed plaintiff in high-risk, alternative instruments which were Ponzi schemes or other fraudulent investments run, managed, controlled, operated and/or created by individuals with whom LaRocca had a personal relationship, a vested interest and kick-back agreements," the complaint states. "These investments were unsuitable and illiquid and LaRocca had some financial interest and relationship with each investment that was never disclosed to plaintiff.
"LaRocca and defendants CSI and SunTrust each failed to advise plaintiff LaRocca, improperly utilizing his discretionary authority over plaintiff's assets, would materially change plaintiff's stated and known investment strategies, would misrepresent Wright's net worth, asset values and expenses and would concentrate a majority of the plaintiff's investment portfolio in unsuitable, privately held, unsecured, illiquid securities which LaRocca had a financial and personal interest in."
Wright claims he didn't know about the mismanagement until 2012, when a third party audited his portfolio to determine his net worth for investment not associated with the defendants.
"It was at this time that plaintiff was advised that many of his largest investments recommended, placed, managed and controlled by defendants were essentially worthless based on their analysis," the complaint states. "The actions and conduct of defendant LaRocca and their various defendant companies including CSI and SunTrust Bank constituted active and/or fraudulent concealment of information and documentation that prevented plaintiff from knowing or discovering the wrongs being committed against him and therefore equitably tolled any applicable statute of limitations for any federal or state law claims set forth herein."
Wright claims CSI and SunTrust ignored several red flags regarding LaRocca's conduct, including that LaRocca never had Wright complete a risk tolerance questionnaire, that LaRocca ignored industry standards regarding document retention systems and that they allowed LaRocca to operate without written investment objectives for Wright.
Wright seeks disgorgement and actual and punitive damages for violations of the Securities Exchange Act, breach of fiduciary duty, fraudulent misrepresentation, willful breach of covenant of good faith and fair dealing, negligence, failure to warn and malpractice.
He is represented by Andrew M. Smith, with SmithBridge.