Denver Broncos quarterback Mark Sanchez is among a number of athletes involved in a lawsuit in Dallas after they invested $30 million in a “ponzi-like” scheme run by an investment adviser.
The adviser, Ash Narayan, who was working for RGT Capital Management when he got the investments, is accused of ignoring the requests of investors, which includes Sanchez and Major League Baseball pitchers Roy Oswalt and Jake Peavy. He is also accussed of forging documents. The U.S. Securities and Exchange Commission has filed a lawsuit against Narayan in Dallas.
According to reports, Narayan appealed to Sanchez and others by appealing to their Christian faith. Both Peavy and Oswalt met Narayan in similar circumstances.
Sanchez, who’s set to be the starting quarterback for the Denver Broncos this year, met Narayan soon after entering the National Football League in 2009, he said in a court filing. The two attended the same church in California, and Sanchez said he believed the adviser was a devout Christian and highly qualified. The quarterback had his NFL paychecks deposited directly into a brokerage account.
Narayan was using the money invested by Sanchez and others to help fund a ticket company Narayan was on the board of.
Narayan concealed multiple conflicts of interest from investors, the SEC said in its lawsuit against him. He directed the athletes’ cash to The Ticket Reserve Inc., which allows fans to reserve face-value tickets to sporting events where the teams have yet to be determined, the SEC said. He was on the company’s board of directors, owned more than 3 million shares and was its primary fundraiser — raising more than 90 percent of the company’s investment capital, the agency said.
Besides failing to disclose his conflict of interest, Narayan ignored the requests of his clients. Sanchez, Peavy, and Oswalt all said they wanted conservative investments. But Narayan went on to invest a large portion of the athletes’ money in The Ticket Reserve Inc., even when the company was failing.
While ignoring the athletes’ requests, Narayan also forged the signatures of his clients and poured large sums of money into the corporation. Oswalt said that at one point that 80 percent of his major league salary was devoted to Narayan and his investments. Peavy said that the majority of his $15 million personal wealth was put toward the company without his approval.
In mid-2011, Sanchez agreed to make a $100,000 investment in TTR. Instead, Narayan forged documents and directed more than $7 million of Sanchez’s money to the ticket company, the SEC said. In total, Narayan transferred more than $33 million from all investors to TTR, earning almost $2 million in hidden compensation.
Narayan’s poor business practices began to come into question in March, when he was fired by RGT and investigated for possible wrongdoing. While this lawsuit is going on, all sides of the case are failing to disclose much publicly. However, the facts revealed in the court documents are shocking enough without any reactions from the parties involved.
