A federal judge in Atlanta ruled that the NFL players who entrusted their funds to Kirk Sean Wright, CEO of hedge fund International Management Associates of Atlanta, may move forward with their case over lost investments.
The FBI in association with the IRS, DOJ and SEC investigated why requests by current and former NFL players for their funds were ignored. The amount of the loss of funds in question is about $20 million. The investigation resulted in charges against Mr. Wright and a trial date is pending.
"It's a tremendous victory for our clients and all former and current players," said their lawyer, Jim Evangelista, of the law firm Motley Rice.
The ruling means the case will go to the discovery phase, in which the players' attorneys will seek documents and depositions of NFL officials about why they recommended the now-bankrupt and defunct hedge fund.
The players accuse the NFL and union of breach of fiduciary duty for approving the services of Kirk Wright and Nelson Keith Bond, co-heads of the bankrupt hedge fund, without doing background checks. Wright was ordered on Feb. 12 to pay the U.S. Securities and Exchange Commission $20 million in its lawsuit over the failed fund.
Wright and his hedge fund 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.
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