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IMG Allegedly Steered Stars Money to Stanford for Kickbacks

According to the New York Post, disgraced financier R. Allen Stanford's scam could ensnare star athletes represented by Ted Forstman's management firm IMG. Allegedly, IMG and Stanford Financial quietly entered into a quid pro quo agreement whereby IMG would advise its clients, including golfers Tiger Woods, Arnold Palmer, Sergio Garcia and others to have their money managed by Stanford in return for for a payment in the low to mid seven figures.

If true, such an arrangement would be highly unethical and most likely illegal. It is trading on its clients names for its own benefit and a gross conflict of interest. To the extent that the clients suffer losses as a result of Stanford's scams, I think they have excellent cases for recovery of the losses and damages against IMG. A decent case for punitive damages could also be made as IMG was a party to defrauding its clients. Since its unlikely the clients will be able to recover anything lost to Stanford from Stanford Financial or Stanford himself, the prospects of another source for recovery should take a little of the sting out of the loss. Of course, these golfers and other athletes should all be in the market for new agents too.

Full post as published by Sports Biz on February 21, 2009 (boomark / email).