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|03-07-2006, 10:05 PM||#1|
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Seven players sue exec in possible hedge fund disappearance
March 7, 2006
CBS SportsLine.com wire reports
ATLANTA -- The federal government and several professional football players want to know what happened to the hundreds of millions of dollars the players and other investors poured into an Atlanta-based hedge-fund group.
But before they can find the money, they have to find Kirk Wright.
Days after Wright and his company, International Management Associates, were sued in federal and state court, neither he nor the money has surfaced. The Securities and Exchange Commission filed a federal lawsuit Feb. 27 against Wright and his firm, alleging five counts of fraud. The lawsuit joins a civil complaint filed in Georgia state court 10 days earlier.
The first hearing in the federal case is set for Wednesday, but even Wright's attorney won't say if his client will show up.
Wright "has made known his objective of finding a resolution that is acceptable to all interested parties," said his attorney in the federal case, Jacob Frenkel. "Sometimes doing that takes a little bit longer than many would like or expect."
Listed as plaintiffs in the state lawsuit are Terrell Davis, Steve Atwater, Rod Smith, Ray Crockett, Blaine Bishop, Al Smith -- all current or former Denver Broncos -- and Clyde Simmons, a former longtime player for the Philadelphia Eagles. Their attorney, Mark Trigg, has not returned messages left at his Atlanta office.
Wright and his company are accused of collecting between $115 million and $185 million from at least 500 investors since 1997 and misleading some of them -- through false statements and documents -- to believe the value of those investments was increasing.
"Certainly over the past year and earlier, the amount of money that was supposed to be in the respective funds was, in fact, not there," SEC lead counsel Bill Hicks said.
International Management Associates was founded in 1997 and is based in Marietta, a suburb about 10 miles north of Atlanta. The company's Web site recently posted a statement that said the site is "temporarily closed and a court appointed receiver is currently reviewing the financial situation of the company." The site says all the company's financial transactions have been frozen.
A call made Tuesday to the telephone number listed for the company's Marietta office was answered by what sounded like a fax machine.
Before the Web site was changed, Wright was listed as chief executive and founder of the company, as well as the person responsible for overseeing the firm's investment decisions and trading strategies.
According to the site, Wright received his master's degree from Harvard University and is an established financial adviser and former vice president of the global consulting practice at Kaiser Associates, an international consulting firm.
As recently as Jan. 25, International Management Associates reported $166.6 million in assets spread across five hedge funds it manages and advises. "Virtually all of those assets are now missing and are not at the broker-dealer where they are purported to be located," the SEC said in its lawsuit.
Frenkel would not comment on how recently he had spoken with his client, who is now considered a fugitive
"Various counsel have communicated with the government on his behalf since the allegations arose," Frenkel said.
"Mr. Wright has conveyed previously to the government his intent to be responsive to the government's investigation," Frenkel said. "He has not indicated to the government either personally or through counsel any change in those plans."
Frenkel, a former SEC attorney and federal prosecutor, said the government was in a position of having to make allegations quickly based on the best information available.
"As part of any process of seeking a resolution, it stands to reason that a person who cooperates will bring information to the table to correct any allegations that may be incomplete or incorrect," he said.
Examples of Wright's alleged duplicity are listed in court documents. When several investors demanded to see brokerage account statements from hedge funds in October, Wright produced statements he said were from online brokerage Ameritrade, showing over $155 million in securities from four accounts. According to the lawsuit, three of the accounts did not exist and the fourth was not held by any of those investors.
The Associated Press News Service
BOW DOWN TO THE BLACK AND GOLD!!!!!
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