Former NFL wide receiver Terrell Owens is suing agent Drew Rosenhaus and his brother Jason Rosenhaus for breach of fiduciary duty, fraud, and negligence, seeking to recover up to $6.5 million from the agents, according to legal filings obtained by Yahoo! Sports.
According to the lawsuit, Owens is contending Rosenhaus introduced him to now-banned financial adviser Jeff Rubin and recommended that Owens hire Rubin to manage his finances. Upon hiring Rubin, Owens alleges in the lawsuit that the financial adviser began to place his money in a series of bad investments, including an illegal and now-bankrupt casino project in Alabama.
Owens alleges that taking the Rosenhaus brothers' advice and hiring Rubin – coupled with their failure to warn the wideout of Rubin's various red flags – ultimately caused him to lose nearly $5 million, as well as roughly $1.5 million his investments could have generated if properly invested.
"Terrell trusted [Drew] Rosenhaus when he recommended that Terrell hire Rubin as his financial adviser," said Owens' attorneys, Curtis Carlson and Chase Carlson of Miami-based Carlson & Lewittes, P.A. "It is completely ridiculous that Rosenhaus would refer a five-time Pro Bowler to a financial advisor who has been accused of stealing from his clients in the past, whose college degree was in Exercise Science, and who was inexperienced. Rosenhaus should have steered Terrell away from Rubin, not toward him."
Rosenhaus declined comment.
Yahoo! Sports previously detailed how Rubin leveraged his relationship with Rosenhaus to secure player-investments in the failed Alabama casino project that resulted in the loss of more than $40 million by 32 NFL players. Eighteen of those players were one-time Rosenhaus clients. Among them were Jevon Kearse, Fred Taylor, Frank Gore, Plaxico Burress, Clinton Portis, Santana Moss and Owens.
Rubin was ultimately banned from working in the financial industry for life by the Financial Industry Regulatory Authority for recommending that his clients invest in the failed casino project.
"This case demonstrates how broker misconduct can target high-income, inexperienced, and vulnerable investors," FINRA's executive vice president and chief of enforcement, Brad Bennett, stated in a March 2012 news release announcing the ban. "Jeffrey Rubin took advantage of professional athletes who placed their trust in him."
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Among the allegations in Owens' filing:
• That the reason the Rosenhaus brothers referred Owens and other professional athletes to Rubin was because the agent and adviser had a "mutual, reciprocal referral relationship and not because of Rubin's merit as a financial advisor or an investment adviser." Later in the complaint that relationship is described as "a close financial relationship."
• That "[a]lthough Defendants Drew Rosenhaus and Jason Rosenhaus knew Rubin (a) was a neophyte financial planner, (b) lacked the skill, education and experience possessed by accomplished investment advisers … and (c) was unethical or at least had engaged in highly questionable behavior, Defendants nonetheless referred Owens and other professional athletes to Rubin because Rubin referred clients to Defendants. At one point in time, roughly two-thirds of Pro Sports Financial's clients were clients of Defendants."
• That Rubin stole money from Owens and put the wideout into several unsuitable investments, sometimes forging Owens' signature to purchase the investment.
• That Rubin placed Owens in those investments "for the purpose of generating over-sized commissions for himself."
• That "Rubin was using, if not abusing, illegal drugs including cocaine and ecstasy. In 2005, Rubin's fiancé died of a drug overdose, which Defendants had knowledge of." And that the Rosenhaus brothers "had a continuing and ongoing fiduciary duty to Owens to advise him of" issues that would call into question Rubin's ability to effectively manage finances.
• That Rubin hired Drew and Jason Rosenhaus' brother-in-law, attorney Adam Swickle, to defend Rubin in April 2006 after a Rottweiler dog bit the face of a party guest at an event Rubin hosted. The complaint goes on to say the Rosenhaus brothers were aware their brother-in-law had been retained to defend Rubin in that matter.
• That "by 2006, it was known to [the Rosenhaus brothers] that Rubin had emotional issues that seriously affected his ability to perform his job, but [they] never advised Owens of [those] facts."
• That Owens paid Rubin "just shy of $300,000 in fees over and above the oversized commissions charged by Rubin for securities transactions in Owens' account."
• That Rubin failed a number of securities exams, and "has never taken or passed either the Series 65 or 66 examinations in order to be a Registered Investment Adviser."
• That the Rosenhaus brothers "were well aware of [those] industry licenses and regulations" because their father, Robert E. Rosenhaus, held similar credentials at one point, prior to receiving a $3 million customer complaint from one-time Rosenhaus client, Yatil Green.
• That the Rosenhaus brothers steered former NFL player and client Barrett Green to Rubin, and were later informed by Green that Rubin had misappropriated two of his game checks and was mismanaging his finances. The lawsuit alleges the Rosenhaus brothers continued to refer clients to Rubin after Green raised these issues.
The NFL Players Association was investigating the relationship between Rubin and Rosenhaus in September 2012, but it's unclear if the inquiry is ongoing. According to the lawsuit, Rubin's alleged financial misdeeds began in 2003 and continued through March 2011. During a large portion of that time, Rubin was also registered in the NFLPA's financial adviser program. Union spokesman George Atallah did not respond to an email, text message or call for comment.
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