Raskin leaves TLA, forms own firm NBPA bets on power of its stars Labor & Agents: Vayner velocity Tobias signs on with TLA Labor & Agents: Rosenhaus wins again WME hauls in Stanton for off-the-field NBPA closes the books on Tennessee tax Labor & Agents: Casserly advises at EXOS Key terms in the MLB CBA Players expect to keep up as MLB grows
SBJ/June 2 - 8, 2003/Labor Agents
Countersuit latest shot in player-finance war
Published June 2, 2003
A company that audited more than 50 NBA players' finances has filed a lawsuit claiming that financial adviser Leland Faust's firm paid $100,000 to a friend of an NBA player in order to get the player's business.
Prim Capital, which was hired by the NBA players union to audit financial advisers, also claimed that the same NBA player, Danny Fortson, was "delivered" to prominent agent Arn Tellem by Faust's company, San Francisco-based CSI Capital Management. Prim Capital, which filed its lawsuit late last month in a San Francisco federal court, was itself sued by CSI Capital in April.
An attorney for CSI said there was no $100,000 payment, and that the claim that CSI influenced Fortson to sign with Tellem could not be true because no one from CSI met Fortson until 2000 — three years after he signed with Tellem.
"Prim's filing is full of false, but scandalous, accusations," said Edward King, attorney for Faust and CSI.
A spokeswoman for Tellem said the allegations "are completely false."
Attempts to reach Fortson, who retained Prim to audit his financial relationship with CSI but later terminated Prim, were unsuccessful. His agent, Raymond Brothers, provided Prim with the information on which most of the allegations surrounding Fortson are based.
"I have no comment other than some of this has been misconstrued and will be cleared up at a later time," said Brothers.
Joseph Lombardo, a principal of Prim, wouldn't comment other than to say, "The lawsuit speaks for itself."
The Prim lawsuit is just the latest salvo in an increasingly bitter dispute between CSI, which represents numerous wealthy athlete clients, and Prim, which has been auditing NBA players' financial relationships since 2001 with the approval of the National Basketball Players Association.
CSI sued Cleveland-based Prim in April, claiming slander and unfair business practices, and alleging that the purpose of Prim's audits of NBA players was to steal those players as clients for itself.
In addition to Fortson, Prim was retained at one time or another by four NBA player clients of CSI: Bryant Stith, Elton Brand, Howard Eisley and Pat Garrity. Prim's lawsuit claims the problems started in July 2002, when Stith formally complained to the NBPA that CSI wouldn't provide Prim with information about Stith's financial relationship with CSI.
Representatives of CSI and Prim held two meetings with NBPA executive director Billy Hunter regarding Prim's audits, in December 2002 and March 2003, according to the Prim suit. At the December meeting, Hunter asked Faust to account for the time spent by CSI to justify fees it was charging different players.
Prim's lawsuit claims that CSI charged Stith $30,000, Brand $50,000, Eisley $20,000 and Garrity $10,000 "for virtually identical services." Prim alleged that, "Through 2000, Stith was charged an amount in excess of $300,000 for financial and legal service fees without time records or other back-up showing the extent and nature of services provided."
King responded, "The amount and services provided to the client is information that is confidential to the clients and I am appalled that Prim purports to disclose client's confidences in a public document. I can categorically say that the allegation that the various players are receiving 'virtually identical services' is false."
In March 2003, Philip Scott Ryan, an attorney retained by CSI and Faust, wrote to Hunter questioning "what appears to be Prim's 'pimping' NBPA." In the letter, which Prim filed with its lawsuit, Ryan asked Hunter not to endorse any particular firm as auditors for its NBA player members, and to require any financial firm that the union invites to speak to its members to agree not to represent any players it meets through the union.
A contract formalizing the relationship between Prim and the NBPA, signed in April after CSI first sued Prim, prohibits Prim from soliciting or accepting as a client anyone to whom Prim provides its auditing services.
King wouldn't address Prim's allegations point by point, but used one as an example of what he said were allegations not supported by facts.
The Prim lawsuit states that Brothers told Prim that "clients of his were sold disability insurance policies by CSI even though their NBA contracts were guaranteed."
King's response: "CSI has never sold an insurance policy to anybody in the world, anywhere. The implication of the allegation is false."
A spokeswoman for the California Department of Insurance said neither Faust or CSI were registered to sell disability insurance in the state.
"These examples of Prim's false allegations are typical of their entire filing," King said. "Prim's filing is obviously just an attempt to deflect attention from Prim's wrongdoing as alleged in CSI's original complaint."
But Prim claims in its countersuit that CSI's original complaint contained false statements and that CSI was circulating the lawsuit among NBA players in an attempt to stop them from doing audits. The lawsuit claims that CSI wants to stop the audits because Prim has "discovered and will continue to discover various improper, illegal and or unethical practices by CSI and many other practices that are not in the best interest of players."