Will NFL Superstar Dwight Freeney’s Bank of America Lawsuit Force Big Banks to Reform Their Investment Management Businesses?

 

“Attorneys for NFL linebacker Dwight Freeney (pictured) announced the filing of the lawsuit against Bank of America in downtown L.A. (CBS)”
 

Re-posted by Nicholas Stix

This is potentially gigantic, because it exposes sordid goings-on at one of the world's biggest banks, which civilians like me and the other readers here would never be privy to. I'm sure Dwight Freeney, 35, thought he was playing it safe and conservative with his investment portfolio.

Freeney, whose salad days were with the Peytion Manning-led Baltimore Indianapolis Colts, is a seven-time Pro Bowler, three-time All-Pro, with a Super Bowl ring, who is a serious contender for the Pro Football Hall of Fame in Canton, Ohio.

Apparently, even megabanks like BofA, handling trillions of dollars, are eliminating full-time positions, including people handling accounts in the tens of millions of dollars, and filling them with unscrupulous, unvetted part-timers, likely as “contractors” with no benefits. (And then the banks seek to use their own unscrupulousness as an out from having to pay the piper: ‘They weren’t our employees, so we’re not responsible!’ Did BofA inform Freeney of this state of affairs in advance? To ask the question is to answer it.) I can’t imagine how anything could have gone wrong with that strategy!

There’s a concept in Anglo-American law that is as old as investing, called “fiduciary responsibility.” BofA is apparently implying, “Since we were unethical in putting together Mr. Freeney’s team in the first place, we can’t be held to ethical standards in the way things went wrong.”

I can't see BofA letting this go to trial (though I wish it would!), because discovery would be a b---h, and would lead to the next year's blockbuster bestseller, and the blockbuster movie of the year after that.

I think BofA will seek to sandbag Freeney, drag this out, and eventually settle for about $5 million, plus his lawyers' fees. Look for more such lawsuits, and internal reform in the way big banks handle customers' investment portfolios.

This looks like a case of a star athlete who did things the right way, and still ended up broke. I thought only little guys like me got treated this-a-way!
 

NFL Linebacker Alleges Bank Of America ‘Aided & Abetted’ $20M Fraud Scheme
March 31, 2015 1:50 P.M.
CBS LA

LOS ANGELES (CBSLA.com) — One of the NFL’s highest-paid defensive players announced a lawsuit Tuesday alleging Bank of America “aided and abetted” a fraud scheme that cost him $20 million.

Attorneys for Dwight Freeney, a defensive end and linebacker who last played for the San Diego Chargers met with reporters in downtown Los Angeles to officially announce filing the complaint in Los Angeles Superior Court.

According to the lawsuit (PDF), Freeney authorized BofA in 2010 to manage his assets, including his NFL salary.
In addition to BofA, the complaint names Michael Bock, a senior vice-president of the bank’s Global Wealth & Investment Management unit, as a defendant.

Attorneys say BofA did not disclose to Freeney that Eva Weinberg – who was assigned by BofA to manage Freeney’s business affairs – was only a part-time employee at BofA and was not licensed to give Freeney investment advice.

The complaint also alleges BofA, Bock and Weinberg also lied to Freeney about the true identity of Michael Stern, who was brought onto Freeney’s BofA financial team.

According to attorneys, Stern was introduced to Freeney as “Michael Millar”, [sic] a successful Miami Beach businessman, but who was allegedly linked to failed real estate ventures and allegations of bribing Miami city officials.

Once Weinberg and Stern gained control of Freeney’s finances, they “promptly went about stealing at least $8.5 million,” according to the complaint.

“BofA’s deceitfulness is at the heart of our lawsuit,” said attorney Jeffrey Isaacs. “BofA kept Dwight completely in the dark about the qualifications and the backgrounds of the people managing his money.”

A statement from BofA spokesman Bill Halldin denied the bank played any role in the alleged scheme.

“The two people responsible for this wrongdoing have already been convicted,” Halldin said. “The primary wrongdoer never worked for the bank or any of its affiliates and the other person committed her criminal conduct after she left Merrill Lynch in 2010.”

Freeney, who has the 20th best record in NFL history for sacking quarterbacks, earned a Super Bowl ring in 2007, and played in three AFC championship games, has played for the Chargers for the last two seasons. He is currently an unrestricted free agent.