A California-based investment adviser has been charged with defrauding professional athletes by siphoning off more than $33 million from client accounts to a struggling online ticket business in which he is a shareholder.
The U.S. Securities and Exchange Commission on Tuesday said Ash Narayan, a then-adviser with RGT Capital Management, made high-risk investments in The Ticket Reserve (TTR) without his clients’ consent. The alleged victims include Denver Broncos quarterback Mark Sanchez and San Francisco Giants pitcher Jake Peavy.
“In each case, Narayan built trust by emphasizing his background and qualifications — including his Christian faith, charitable works, success working with other pro athletes, and his status as [a] licensed attorney and CPA,” the SEC said in court papers.
According to the SEC, Narayan “is not — and never has been — a CPA.” In a civil complaint unsealed Tuesday, the SEC also charged Ticket Reserve CEO Richard Harmon and chief operating officer John Kaptrosky with paying him nearly $2 million in undisclosed finder’s fees to direct his clients’ money to the company.
A federal judge has frozen the assets of the defendants “to protect the SEC’s ability to recover investor funds.”
“We allege that Narayan exploited athletes and other clients who trusted him to manage their finances,” Shamoil T. Shipchandler, director of the SEC’s Fort Worth Regional Office, said in a news release. “He fraudulently funneled their savings into a money-losing business and his own pocket.”
The SEC said Narayan had more than 50 clients at RGT, including pro athletes who relied on him “to pursue safe, conservative investments.” His claim that he was a CPA “boosted Narayan’s credibility,” the SEC said.
He joined TTR’s board in 2003 and, according to the SEC, raised as much as 90% of its capital. According to the SEC, he ignored his clients’ directives, directing more than $33 million to the ticket business without disclosing “TTR’s poor financial condition and the conflicts of interest created by the finder’s fees and his heavy involvement with TTR.”
The improper transfers of funds allegedly included $7.75 million from Sanchez, $15.1 million from Peavy, and $7.6 million from former MLB pitcher Roy Oswalt.
Photo: Keith Allison, via Wikimedia Commons, CC BY-SA 2.0