Fund Manager With NFL Clients Fined $20 Million

Date: Tuesday, February 13, 2007
Author: Jenny Strasburg and David Scheer, Bloomberg.com

(Bloomberg) -- Hedge-fund manager Kirk S. Wright, accused of cheating clients including National Football League players, was ordered to pay $19.9 million in a lawsuit brought by the U.S. Securities and Exchange Commission.

On Feb. 9, a U.S. District Court judge in Atlanta ordered Wright to forfeit $19.8 million and pay a $120,000 fine, the SEC said in a statement today.

The SEC alleged Wright falsified statements about the assets and returns of seven hedge funds managed by his firm, Marietta, Georgia-based International Management Associates LLC. Clients included some NFL players who sued Wright last year after they couldn't retrieve money from their accounts. The SEC filed suit in Feb. 2006.

The hedge funds ``have been providing investors with quarterly statements that misrepresented both the amount of assets in the respective funds and the rates of return obtained by them,'' the statement said. ``In fact, by 2005, the assets of the funds had been largely dissipated, and this fact was not disclosed to the investors.''

Wright was arrested in May on mail-fraud charges. He's in an Atlanta detention center awaiting a criminal trial related to those charges scheduled to begin in May, Bruce Kirwan, his court- appointed attorney in that case against him, said today in an interview. Wright faces multiple counts of money laundering and securities and mail fraud. Kirwan said Wright is representing himself in the case brought by the SEC.

In a third legal action connected to Wright, seven present and former professional football players sued the National Football League and the NFL Players Association in June, They said the organizations recommended financial advisers such as Wright who were unfit, resulting in $20 million in losses.

The NFL and the union approved the services of Wright and other managers of his now-bankrupt hedge fund without doing background checks, the players said in that federal suit, filed on June 23 in Atlanta.

To contact the reporters on this story: Jenny Strasburg in New York at jstrasburg@bloomberg.net ; David Scheer in Washington dscheer@bloomberg.net .