Federal securities regulators said an Atlanta lawyer and former sports agent agreed to settle a lawsuit accusing him and his company of defrauding at least 32 investors out of at least $5.4 million.
Robert Gist allegedly promised investors, including former professional athletes and their families and friends, that he would make conservative investments on their behalf in corporate bonds and other securities, according to the suit filed by the Securities and Exchange Commission last week.
Instead, the lawyer and agent, who the SEC said was not licensed to sell securities, used the money to fund other business interests and to pay his personal expenses, according to the SEC.
Without admitting or denying the SEC’s allegations, the agency said Gist agreed to settle the case.
Efforts were being made Monday to reach Gist and Gist Kennedy & Associates, a law firm also named in the suit, for comment. Gist, 62, was identified as president of the Atlanta company.
Gist’s name was featured prominently in NBA news the late 1990s as an agent to then-controversial Golden State Warriors guard Latrell Sprewell. The player was kicked off the team and suspended from the league after choking and threatening to kill his coach, P.J. Carlesimo. Sprewell went on to play for the New York Knicks and the Minnesota Timberwolves.
Gist was Sprewell’s agent when the player turned down a three-year, $21 million extension of his Timberwolves contract during the 2004-2005 season, calling the figure too low. Gist later famously said, “Latrell doesn’t need the money that badly.”
The SEC suit filed in Atlanta against Gist did not name Sprewell or any other former athlete as being among the customers he was alleged to have defrauded.
“Some of the victims of Gist’s fraud were former professional athletes, members of their families, and other associated with them,” the suit said. It says he gained the customers while he was a sports agent.
Regulators said nearly half of the $5.4 million Gist received from investors, $2.2 million, went to another business, ENCAP Technologies of Roswell, a company created to develop industrial coatings and one where Gist was president and chief executive officer until earlier this year.
Gist was also accused of using part of the millions to distribute bogus “dividends” to investors to make it appear as if their money had been invested in the conservative securities he’d promised. As part of the alleged cover-up, he sent investors false financial statements that showed account activity, earnings and balances that didn’t exist, regulators said.
The SEC also said Gist falsely claimed he was a member of the national Association of Securities Dealers, the Securities Investor Protection Corp. and the Municipal Securities Rulemaking Board.
The suit sought to freeze Gist’s assets and those of Gist Kennedy & Associates. It also sought an accounting of the funds received from investors, repayment of funds and a court injunction to block Gist and the law firm from violating SEC rules.
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