A group of retired players involved in a class-action lawsuit against the NFL over brain injuries was defrauded by their attorney and his Florida investment firm, the Securities and Exchange Commission said Thursday.
The SEC charged Cambridge Capital Group Advisors of Tallahassee, attorney Phillip Timothy Howard and investment manager Don Warner Reinhard with defrauding 20 investors, who largely were the former players.
Howard and Reinhard allegedly raised $4 million from the retired NFL players, about half of whom rolled over their league 401(k) accounts into hedge funds operated by Howard’s law offices.
“We allege that Cambridge, Howard and Reinhard defrauded these particularly vulnerable investors, many of whom invested their retirement savings,” said Eric Bustillo, the SEC’s Miami regional director. “Instead of investing all of the funds’ assets as promised, Howard and Reinhard used a significant portion of investor money to line their own pockets.”
Reinhard is a former registered investment adviser previously barred by the SEC.
According to the SEC complaint, the defendants used the funds to provide settlement advance loans to more than 70 of Howard’s NFL class-action clients.
The SEC also alleges that Howard borrowed $612,000 in undisclosed personal mortgage loans from the funds, which he never repaid.
The SEC complaint was filed in federal court in the Northern District of Florida.
Since the NFL settled a $1 billion class-action concussion settlement in January 2017, more than $685 million has been awarded.