NFL: Fraud case: Suit vs. union, league tossed

A federal judge in Atlanta has thrown out a lawsuit filed by six former NFL players against the league and its Players Association for millions of dollars in investments the players lost to a fraudulent hedge fund.

The former players, including former Pro Bowl defensive backs Steve Atwater and Blaine Bishop, filed suit in 2006 after it was disclosed that Atlanta investment manager Kirk Wright had defrauded investors out of tens of millions of dollars. The suit said the union negligently allowed Wright to be listed as a players’ financial adviser even though more than $400,000 in liens had been placed against him and he had a criminal history.

Wright attracted hundreds of deep-pocketed investors who poured in an estimated $150 million into his firm, International Management Associates. He returned some money to his clients but also spent lavishly on himself —- a $500,000 wedding, a $50,000 Rolex, a $200,000 Lamborghini.

By the time investors tried to get their money back after discovering Wright had lied to them for years, Wright had spent almost all the money.

Wright was prosecuted on fraud charges last year, and a federal jury in Atlanta convicted him of all 47 counts. Days after the verdict, Wright, 37, committed suicide, hanging himself with bedsheets in his jail cell.

The players’ suit accused the NFL and the NFLPA of negligence and breach of fiduciary duty for not conducting thorough background checks.

The six NFL players invested about $20 million with Wright during 2004 and 2005, U.S. District Judge Julie Carnes said in an order handed down on Friday.

Carnes dismissed the suit on several grounds. Most notably, Carnes said, the players’ financial advisers program that listed Wright included a “clear and prominent disclaimer” that says the players association neither endorsed nor recommended any of the advisers on the list. The players were bound by the terms of the union contract and its regulations, which contained the disclaimer, the judge said.

Filing suit against the NFL and the NFLPA, in addition to Atwater and Bishop, were former players Ray Crockett, Carlos Emmons, Clyde Simmons and Al Smith.