August 27, 2008 5:20 PM
UBS Target of Another Lawsuit, This One Brought by NFL Players
Posted by Brian Baxter
Seems like many of our reports lately have been about the troubles Swiss bank UBS finds itself in. We promise it's not intentional, but here's yet another.
Seven current and former National Football League players--including former New England Patriots quarterback Drew Bledsoe--have retained famed trial lawyer Joseph Cotchett of California litigation firm Cotchett, Pitre & McCarthy to sue embattled Swiss bank UBS for fraud.
As reported by Courthouse News Service and TMZ, the civil suit filed Monday in California Superior Court in San Francisco alleges that UBS withheld information on the criminal history of John Rogers, the former founder and CEO of Pay By Touch, a biometric payment service that allowed customers to make payments using their fingerprints.
Bledsoe and the remaining six plaintiffs--Philadelphia Eagles long-snapper Jon Dorenbos, New Orleans Saints tight end Mark Campbell, former Green Bay Packers quarterback Craig Nall, Buffalo Bills quarterbacks coach Gregory "Alex" Van Pelt, and retired NFL quarterbacks Kelly Holcomb and Rick Mirer--say that UBS helped Rogers raise $130 million for Pay By Touch by touting the secure nature of the transactions, according to a copy of the complaint.
But Pay By Touch, which did business under the name Solidus Networks, fared about as badly as an ill-fated fourth quarter Bledsoe pass, losing $137 million and bringing in only $700,000 in revenue. The company filed for bankruptcy in December 2007, and court documents show that it owes nearly $330 million to creditors.
According to court documents, prior to founding Pay By Touch, Rogers managed health clubs in Minnesota and had "a string of run-ins with the law," including various tax liens, criminal misconduct, and adverse civil judgments. "Defendants conspired to withhold this material information from plaintiff investors in furtherance of a fraudulent scheme," allege the plaintiffs. "Rogers had such a detailed history of criminal and civil misconduct and tax evasion prior to his involvement with Pay By Touch that any knowledge of this would have warned investors."
Claiming that Rogers's criminal history was directly relevant to their decision to invest in the company, plaintiffs allege that UBS has tried to shift the burden of due diligence to the same investors the bank touted Pay By Touch to prior to its collapse. The complaint, which also lists several former Pay By Touch executives as defendants, references UBS's recent auction-rate securities troubles but does not disclose how much the plaintiffs lost through their Pay By Touch investments or how much they are seeking in damages.
The fact the NFL players turned to Cotchett for counsel isn't surprising, as the former U.S. Army Special Forces paratrooper has represented the league and several teams on various matters in the past. Cotchett has a reputation as a tenacious trial lawyer, having been hired by Valerie Plame and her husband, Joseph Wilson, in 2006 when the former CIA agent sued several members of the Bush administration for violating her constitutional rights. (A federal appeals court later upheld a district court decision dismissing the suit; Cotchett was out of the office and unavailable for comment.)
William Parish, a name partner at Stockton, Calif.-based Parish & Small, is also representing the plaintiffs. Parish says he got the case from Frank Bauer, a sports agent with Sun West Sports in Stockton, who represents several of the players serving as plaintiffs.
UBS also did not respond to a request for comment and Parish says he is not sure whether the bank has yet retained counsel in the matter.Make a comment