FLBC 032: Solutions for Fixing the Athlete Fraud Problem

Discussion with Chase Carlson and Jonathan Miller about the fraud problem in the athlete and entertainment world.

Podcast Details:

Podcast Title:  Solutions for Fixing the Athlete Fraud Problem
Podcast Series: Financial Literacy Boot Camp
Video and illustrations available on our YouTube channel here.


Questions/Issues We’ll Address on this Episode:
My discussion with Chase Carlson and Jonathan Miller about solutions to fix the athlete fraud problem.

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About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

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When Is Enough, Enough?

Is there a point at which we won’t hear so much about athletes being the victims of financial fraud?

For years, it seems the spotlight has been inexorably drawn to athletes (as opposed to Joe Blow consumer) that have been prey to bad financial advice.  We’ve all read the stories of grand fraud perpetrated under the guise of “financial advice”.  I wonder just how de-sensitized have we become to this phenomenon.  Just recently, 60 Minutes aired yet another example of fraudulent behavior that cost athletes $43 million (of which in all likelihood, there will be little to no recovery).  Couldn’t the major sports organizations create higher barriers of entry to current and “would-be” financial advisors wanting access to their players?  I think having not done so at this point sends a certain message. (I’ll leave that message up to your own imagination.) It has been estimated that just since the NFLPA’s financial advisor program launched in 2002, athletes receiving advice from advisors approved by the program have lost $150 million.  Obviously, there are a lot of ways to attack this problem and it may indeed start with better athlete education.  If so, maybe it is incumbent on organizations like the NCAA to get more involved since the large majority of athletes have to spend some time in an undergraduate classroom before their pro career.  How about making a personal budgeting and financial literacy class mandatory in order to continue NCAA eligibility?  Oh, I’m sure it would get a lot of pushback, but after all, we are asking them to look beyond the next 10 years to their “future” self.  Sports leagues with formal programs like the NFLPA’s Financial Advisor program could radically help efforts by just requiring (or even engaging in) an annual audit of participating advisors (something similar to what FINRA or the SEC would conduct).  We all know that the “Top Four” professional sports leagues have deep enough pockets to fund something like that.

Ultimately, it may have to begin with the athletes willing to speak up to allow change to occur.  Considering the relatively short career of the average athlete, that time may need to come sooner than later.  But then again, maybe no one really cares…

Greed: A Life-Sucking Force

“Dishonest fortunes can be made but can’t be kept. The goal of attaining wealth shouldn’t be a primary consideration for anyone, because it soon becomes replaced with greed.” –The Maven of Financial Literacy

“Dishonest fortunes can be made but can’t be kept. The goal of attaining wealth shouldn’t be a primary consideration for anyone, because it soon becomes replaced with greed.”
–The Maven of Financial Literacy
 Some of buzz of the news world is around a newly released 60 Minutes piece “Thrown for a Loss” featuring former NFL running back Fred Taylor and current NFL tight-end Vernon Davis as individuals left holding “the bag” from another private investment deal gone bad.  Jeff Rubin, their then financial advisor, over-promised and under-delivered more than just returns for these guys and the several others he attracted to an electronic bingo deal in Alabama.  After reading the story, one wonders, “where’s the problem”?  With the players?  With the financial advisor?


Consider the following:

  • Undoubtedly, players need better tools to make decisions about choosing financial advisors, since there are dishonest players in the industry.  (In this case, the NFLPA had Rubin registered in its financial advisor’s program).  But this is not isolated to just the NFL.  Other sports have had bad advisors, and lest we forget, Bernie Madoff orchestrated one of the biggest ponzi scheme over the course of decades.


  • So, although the NFLPA’s program registered and kept a person like Jeff Rubin in the program, they are no more responsible than the securities industry as a whole, right?  Wrong.  I’d agree with some players that the NFLPA is more culpable and should be held to a higher standard when registering an individual to work with its players.


  • No matter where you place the blame it is evident that greed, pride, dishonesty have never led anyone to a successful outcome.  Greed will always lead a person to make bad decisions because greed is the problem.  Dishonesty will always lead a person to make bad decisions because dishonesty is the problem.  Pride prevents someone from asking for the forgiveness to restore a relationship.  No matter how you slice it, the solution starts with accepting personal responsibility and a change of attitude.