A Tallahassee, Fla.-based investment advisor firm and its two former principals were charged with defrauding investors, most of whom were retired NFL players who had joined a class-action lawsuit against the league over brain injuries, according to the Securities and Exchange Commission.

The SEC civil complaint said Cambridge Capital Group Advisors LLC, also known as Cambridge Capital Advisors LLC; its president,Phillip Timothy Howard, a Florida attorney who represented the retired players in the lawsuit; and Don Warner Reinhard, a former registered investment advisor previously barred by the SEC, defrauded 20 investors, most of them retired NFL players, in two proprietary hedge funds operating out of Howard’s law offices. 

The SEC complaint said from 2015 to 2017, Cambridge and its principles raised about $4.1 million from the investors through the offer and sale of securities in the form of limited partnership interests in two private investment funds for which Cambridge was the general partner and investment manager.

Instead of investing the money, the prinicpals used most of the money to pay lawsuit settlement advances to the same NFL players who made the investments, the complaint said. The players involved in the case were among thousands of former NFL players who were suing the NFL, arguing that concussions and other head injuries suffered while playing football had caused them permanent brain injury.

Howard and Reinhard also used more than 20% of the funds to pay themselves fees and to pay Howard's personal mortgage, the complaint added.

"The settlement advances generally took the form of a single lump sum disbursement ranging as high as $390,000, or a monthly disbursement plan with payments from the funds to the players ranging as high as $11,000 per month," the complaint stated."Many players entered into both lump sum and monthly settlement advance agreements with the funds."

Howard, the complaint said, acknowledged that the players “brain function is not there, their body has been beat up from the NFL, they don’t have employment capacity, they don’t have credit, and they don’t have capital anymore.”

Still, the complaint said, he and Reinhard solicited the players to invest in the funds. More than half of them were former players who used funds from their  NFL 401(k) accounts to make the investments, the complaint said.

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