Denver Broncos quarterback Mark Sanchez, along with Major League Baseball pitcher Jake Peavy and former big leaguer Roy Oswalt, had millions stolen from them by a fraudulent financial advisor, Bloomberg.com reported.
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The U.S. Securities and Exchange Commission today announced that it has obtained a court order freezing the assets of investment advisor Ash Narayan.
According to court documents, Narayan directed more than $30.4 million into the ticket business from three current and former athletes: $15.1 million from Peavy; almost $7.8 million from Sanchez; and almost $7.6 million from Oswalt. The adviser gained their trust through religion and their interest in charitable works, the SEC said.
The firm said it is “continuing to cooperate with the SEC” and has filed its own lawsuit in federal court in Chicago against certain members of the board and the CFO of Ticket Reserve, alleging that they “breached their fiduciary duties through conduct that amounted to gross mismanagement”.
Instead of directing their earnings into low-risk investments, Narayan allegedly put the money into The Ticket Reserve, Inc., a struggling website created to allow fans to reserve face value tickets to sporting events.
The Ticket Reserve became dependent on Narayan’s fraudulent payments and provided him $2 million in illicit compensation in return, in addition to making “Ponzi-like” payments to existing investors using money from new investors, according to the SEC.
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Representatives of Sanchez, Peavy and Oswalt didn’t respond to requests for comments.
All three athletes sought low-risk, conservative investment strategies, the SEC said.
“Narayan exploited athletes and other clients who trusted him to manage their finances. He fraudulently funneled their savings into a money-losing business and his own pocket”, Shamoil T. Shipchandler, director of the SEC’s Fort Worth regional office, said in a statement. The SEC says Narayan has never been a CPA. Given how much money they make, athletes are a common target for schemes like the ones Narayan is alleged to have committed.
TTR was cash-strapped for years and unable to generate sufficient revenue to cover its operating expenses, RGT said in the lawsuit.
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“Between 2011 and 2016, Narayan invested approximately $15 million of my funds in (the ticket business) without my authorization”.
