On August 29, 2019, the SEC ruled that attorney Phillip Timothy Howard, his investment adviser firm, Cambridge Capital Group Advisors LLC, and Howard's business partner Don Warner Reinhard, defrauded twenty investors by convincing them to invest a cumulative total of over $4 million into two proprietary hedge funds managed by the firm which were actually used for other purposes.
The firm represented to the investors that the funds would invest in a variety of instruments but in reality, the majority of the funds were used to pay settlement advances to over seventy former NFL players who had engaged Howard to represent them in a class action lawsuit against the NFL claiming they had suffered brain damage related to concussions. Eighteen of the twenty defrauded investors were former NFL players who had engaged Howard in connection with the class action lawsuit, many of whom utilized retirement funds, including funds from the NFL 401(k) accounts to fund their investments.
In addition to using the money in order to make advance settlement payments to the former NFL players, including those who invested in the funds, Howard and Reinhard took significant broker" fees on the settlement advance loans and Howard used a portion of the funds for his own mortgage costs which he did not repay. Howard and Reinhard failed to disclose Reinhard's investment adviser bar as well as jail time Reinhard had served related to bankruptcy and tax fraud from investors. For more information see here and here.
