The Securities and Exchange Commission filed a fraud lawsuit Monday against the International Management Associates hedge fund, whose clients include National Football League players who say they lost millions of dollars.
Atlanta-based International Management and founder Kirk Wright overstated the value of the fund and concealed losses, according to the suit, filed in federal court in Atlanta.
Last month the hedge fund claimed in financial filings that it had $185 million in Ameritrade Inc. accounts, according to the SEC suit. The SEC says it confirmed Ameritrade has less than $500,000 in related accounts. The SEC seeks a court order barring the company and Wright from participating in any more alleged fraud and to force Wright to return ill-gotten gains.
On Feb. 17, NFL players Stephen Atwater, Clyde Simmons, Terrell Davis, Roderick Smith, Ray Crockett, Blaine Bishop and Al Smith -- who play or played for teams including the Denver Broncos, Philadelphia Eagles and Kansas City Chiefs -- won a state court judge's order freezing the hedge funds' assets and those of its officers.
The football players, who'd invested $15 million, sued when Wright failed to return their investments and checks for $6 million he wrote to them bounced, according to a court document.
On Friday, in response to the football players' lawsuit, an Atlanta state court judge issued a warrant for Wright's arrest. Wright's lawyer, Jacob Frenkel, is speaking with the "appropriate agencies" about the hedge fund investigation, he said in a telephone interview. Frenkel couldn't be reached for comment about the SEC suit.