Mike Sweeney, a five-time Major League Baseball all-star, filed a lawsuit in the Los Angeles Superior Court against UBS Financial Services Inc. (“UBS”) and his former broker, Ralph A. Jackson III (“Jackson”), alleging that Jackson made unsuitable investments in Sweeney’s portfolio which amounted to $7.6 million in losses. According to the Complaint, Sweeney was introduced to Jackson in or about 1997 or 1998, before Sweeney’s baseball career took off when he joined the Kansas City Royals in 2001 and 2002. Further, in his Complaint, Sweeney alleges that when Jackson transitioned from his original firm Salomon Smith Barney to UBS, in January 2002, Sweeney’s portfolio was 73% invested in municipal bonds, with the remainder in large cap stocks. The Complaint continues to allege that from 2002 through 2007, Jackson invested $6.85 million of his portfolio into 11 private-equity investments that were misrepresented as safe and suitable. These investments ultimately lost Sweeney $4.9 million. Further, Sweeney alleges that Jackson invested $2.7 million into two private-equity investments without his knowledge and authorization. Sweeney’s attorney stated that his case was filed in court, rather than in an arbitration before the Financial Industry Regulatory Authority, Inc. (“FINRA”), because his case falls outside FINRA’s 6-year eligibility rule. FINRA’s 6-year eligibility rule, Rule 12206, states that no claim shall be eligible for arbitration before FIRNA when six years have elapsed from the occurrence or event giving rise to the claim. Sweeney’s attorney informed the media that there is no similar eligibility bar in court cases and does not believe the applicable statute of limitations will bar Sweeney’s case since Sweeney did not uncover the fraud until recently.
Lax & Neville LLP effectively assists investors, and specifically professional athletes, on both a regional and national level, that may have suffered losses as a result of their broker and broker dealer’s sales practice abuses. Furthermore, Lax & Neville LLP has also nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters, including regulatory enforcement proceedings, and securities-related and commercial litigation. Please contact our team of attorneys for a consultation at (212) 696-1999.