(Reuters) - A Florida broker who is accused of steering more than 30 professional football players to invest a total of $40 million in a now-bankrupt casino has been barred from the securities industry, an industry watchdog said on Thursday.
Jeffrey Rubin, who operated Pro Sports Financial Inc in Fort Lauderdale, agreed to be permanently barred from the industry in a settlement with the Financial Industry Regulatory Authority, dated Thursday.
Rubin, whose firm provided financial-related services to professional athletes for an annual fee, neither admitted nor denied FINRA’s findings, according to the settlement.
Between 2006 and 2008 Rubin recommended that one of his National Football League clients - identified in regulatory filings as former Baltimore Ravens cornerback Samari Rolle - invest a total of $3.5 million, the majority of his net worth, in four high-risk securities, including one involving an Alabama-based casino and entertainment project that filed for bankruptcy last year, according to FINRA.
The casino and entertainment complex, formerly known as Country Crossing, changed its name to Center Stage Alabama in 2011. The facility, located in Dothan, Alabama, is still open for bingo.
Rolle, referred to as “Player One” in a letter of acceptance, waiver and consent signed by Rubin, lost at least $3.2 million of $3.5 million overseen by the adviser as a result of “unsuitable recommendations.”
About 31 current and retired NFL players eventually lost a total of about $40 million in the project based on Rubin’s referral, said FINRA.
Among the players who were Rubin’s clients were Plaxico Burress, a wide receiver who played for the Superbowl-winning New York Giants; Clinton Portis, a running back for the Washington Redskins; Santonio Holmes, still a receiver for the Jets; Santana Moss, a receiver for the Redskins; Fred Taylor, a former back for the New England Patriots; Jevon Kearse, a former defensive end for the Tennessee Titans; and Kyle Orton, a quarterback who played for Denver Broncos.
Rubin’s lawyer, Patricia Christiansen, declined to comment on the order.
The case illustrates the risks facing many professional athletes: They get lucrative contracts at a young age, when they often lack financial savvy, making them easy prey for investment scams.
Advisers who steer athletes into risky deals often earn huge fees at the expense of their clients. Rubin received a 4 percent ownership stake in the casino project and at least $500,000 in exchange for referring clients to the casino project, according to the FINRA settlement.
FINRA in its order did not fine Rubin or seek repayment, but some of the athletes have taken legal action against him.
Owens, a wide receiver who last played in the NFL in 2010, is suing Rubin for a number of claims, include the risky investments associated with the casino project, according to his lawyer, Boca Raton, Florida-based Michael Simon.
Rolle filed an arbitration claim against Rubin and others in March 2011, requesting $5 million in compensatory damages. Rolle, who eventually settled with Rubin, said in a written complaint to Rubin that his advice “created a situation in which millions of dollars are unaccounted for and inaccessible.”
Rolle could not be reached immediately for comment.
Reporting by Ashley Lau and Suzanne Barlyn in New York; editing by Jennifer Merritt, Gerald E. McCormick, Matthew Lewis and Jeffrey Benkoe