Closings and delays

BB&T faces lawsuit from NFL players

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WINSTON-SALEM, N.C. — BB&T Corp. is the subject of a high-profile lawsuit filed by 16 current and former NFL players involving disputed financial transactions made within a south Florida bank before BB&T bought the bank in July 2012.

The players said in their Nov. 1 complaint that BankAtlantic allowed a concierge financial management firm to open new accounts in their names via forged signatures and to withdraw nearly $53 million without their permission or knowledge.

The plaintiffs include Jamaal Anderson, Frank Gore, Santonio Holmes, Jevon Kearse, Ray Lewis, Brandon Meriweather, Santana Moss, Clinton Portis and Fred Taylor. All have connections with south Florida either professionally, collegiately or by residence. BankAtlantic was based in Fort Lauderdale.

Kearse is listed as having lost the most money at $7.96 million. The minimum amount lost is $515,000.

Andrew Kagan, an attorney representing the plaintiffs, said Thursday that “all of the transactions occurred before the purchase” of BankAtlantic by BB&T.

Kagan said BB&T is being sued for refunds because it assumed the liabilities of BankAtlantic, which did not act “in good faith and reasonable care” with the players’ money. He said BankAtlantic “aided and abetted fraud” committed by now-banned financial advisor Jeff Rubin and Pro Sports Financial Inc. officials.

BB&T spokesman David White said Thursday that the transactions “did not happen at BB&T.”

“Unfortunately, we inherited the responsibility for it when we acquired BankAtlantic. Because this is pending litigation, we cannot comment further.” BB&T has not filed a response to the complaint.

Analysts say they are curious to see how much legal and financial responsibility a jury may place on BB&T for account originations and transactions that its officials did not approve.

“BB&T had absolutely nothing to do with BankAtlantic’s documentary processes and risk procedures for controlling fiduciary fraud here,” said Tony Plath, a finance professor at UNC Charlotte.

On the flip side, analysts wonder how much responsibility a jury may place on the players for not paying closer attention to their money.

“How can those with so much money have no idea where their cash is flowing until it’s gone?” asked Brenda Barron, an analyst with The Motley Fool.

Kagan told Yahoo! Sports that BankAtlantic’s negligence caused “irreparable harm” to the players. He said Kearse, Moss and Portis had homes foreclosed due to the BankAtlantic transactions.

The lawsuit said the heart of the complaint involves a special division that BankAtlantic “dedicated to targeting and servicing athletes and others in the sports industry.”

The plaintiffs accuse BankAtlantic of allowing Pro Sports officials to open new accounts in their names through forged signatures and power of attorney authority. Money from other accounts allegedly were funneled into the new accounts and then placed in unauthorized investments. The lawsuit accuses BankAtlantic of sending statements for the new accounts to Pro Sports rather than the players.

The lawsuit accused BankAtlantic of processing the transactions even though bank officials knew they were not authorized.

Most of the withdrawn money was geared toward an Alabama casino venture known as the County Crossing project. According to Law360.com, Alabama officials determined in July 2012 that the casino-style gaming component was illegal under state law. The company subsequently went into bankruptcy.

The Financial Industry Regulatory Authority said Rubin failed to obtain the required approval to participate in the securities transactions involving the casino. The agency said 31 NFL players were involved in the scheme, with a combined loss of $43 million.

The lawsuit said the players were not advised of the significant financial risk involved in the casino project. In March, the regulatory authority barred Rubin from the securities industry “for making unsuitable recommendations” to customers “to invest in illiquid, high-risk securities issued in connection” with the casino.

The National Football League Players Association sent a memo to players in May about Rubin’s ban and that he was no longer registered in its financial adviser program. Rubin was registered in the program from 2002 to 2009. Officials with the association could not be reached for comment Thursday about the lawsuit.

Barron said that while the images of allegedly forged signatures are “fairly compelling, what isn’t so clear is what sort of authority over their accounts did the players gave Rubin prior to his making investments.”

“Obviously, if it turns out they didn’t know a thing about it, the players are deserving of compensatory damages and maybe a quick course in personal banking. If they did have some knowledge, bad investments are bad investments and not necessarily criminal, the Alabama casino notwithstanding.”

Plath said he believes the plaintiffs must prove that any negligence and breach occurred under BB&T’s watch after it acquired BankAtlantic to win the case.

“BB&T is well versed in how to structure trust agreements and fiduciary money management arrangements legally and accurately so as to avoid the bank’s exposure to fraud and negligence charges,” Plath said.

By Richard Craver/Winston-Salem Journal