SAN FRANCISCO (CN) – Drew Bledsoe and six other NFL players say UBS Securities defrauded them by withholding information about the criminal history of John Rogers, who claimed his companies, Solidus Networks and Pay By Touch, could enable consumers “to pay by using their fingerprint.”
Bledsoe claims that “UBS received millions of dollars in placement fees” while helping Pay By Touch raise $130 million. Pay By Touch had lost $137 million on only $600,000 in revenue when it filed for bankruptcy in December 2007, the complaint states.
The football players claim that “despite knowing about the many legal troubles of Pay By Touch’s founder, chairman, and one-time CEO, John Rogers, UBS and the Executive Defendants conspired to withhold this material information from plaintiff investors in furtherance of a fraudulent scheme. … The intent of the scheme was to induce plaintiffs to rely on the misrepresentations and omissions and to invest in Pay By Touch. Rogers had such a detailed history of criminal and civil misconduct and tax evasion prior to his involvement with Pay By Touch that any knowledge of this would have warned investors.”
The complaint continues: “Defendant also conspired to misrepresent and withhold from plaintiffs the findings of a Federal Deposit Insurance Corporation Report. After investigating Pay By Touch’s payment processing facility, the FDIC concluded that Pay By Touch’s management had allowed serious problems to persist. Yet, despite knowing about the FDIC’s findings, defendants participated in a scheme to hide the FDIC’s investigation from investors and instead to suggest that no such investigation had occurred.”
The football players say they invested in Pay By Touch “based on defendants’ hype about Pay By Touch and its management.”
Solidus Networks and several subsidiaries filed for bankruptcy in December 2007, “directly as a result of the mismanagement of the company,” the complaint states.
Suing with Bledsoe are Kelly Holcomb, Rick Mirer, Craig Nall, Gregory “Alex” Van Pelt, Mark Campbell, and Jon Dorenbos.
The complaint does not state how much the players lost.
They also sued Pay By Touch CFO Jeff Amann, CFO Gus Spanos, executive vice president Brian Miller, and executive vice president and general counsel Steve Zelinger.
They are represented in Superior Court by Joseph Cotchett with Cotchett, Pitre & McCarthy.