Professional athletes are the targets of relentless efforts of investment advisers who engage in fraudulent financial advice. According to a 2008 survey conducted by Sports Illustrated, 78% of former NFL players have gone bankrupt or are under financial stress by the time they have been retired for two years. The same survey found that 60% of former NBA players are broke within five years of retirement. Major league baseball players are also not immune from fraudsters, and dozens of players have filed lawsuits in the past several years seeking tens of millions of dollars in investment fraud losses.
Laurence Landsman, a partner in the Chicago law firm Block & Landsman, has published an article on the problem of athletes who face the devastating effects of financial fraud. The article, which was published by the National Sports Law Institute at the Marquette University Law School, discusses several examples of athletes being defrauded by trusted advisers, and explores how the scams successfully lure unsuspecting athletes.
Athletes are targeted for financial fraud because of their youth, inexperience in investment matters, and the large sums of money they earn. Last year, players on NFL rosters earned a collective $3.3 billion in salaries, with an average of $1.8 million in earnings per player.
Mr. Landsman's article explains how fraudsters use current or former players, who are often victims themselves, to lure their teammates into investment scams that promise large returns that are, in reality, impossible to be achieved. The article also looks into the ineffective effort by the National Football League Players' Association ("NFLPA") to create a program to deter financial fraud against players.
