Ex-NFL Player Warned Players About Financial Advisor

By Donna Gehrke-White, Sun Sentinel

McClatchy-Tribune Information Services

March 27--Former professional football player Johnny Rutledge remembers seeing the first hint of trouble several years ago. His 2004 life insurance policies were signed by someone else.

In an instant, Rutledge knew he could no longer trust Jeffrey Rubin, his Broward County financial adviser who was working for Northwestern Mutual Life Insurance at the time.

Rutledge, a Belle Glade native who played five years in the NFL with the Arizona Cardinals and Denver Broncos from 1999 to 2003, ultimately received $40,000 from Northwestern Mutual in a quiet settlement after he complained about Rubin and Northwestern Mutual to the Financial Industry Regulatory Authority (FINRA), the largest independent securities regulator in the United States. No criminal charges were filed

But he didn't stay quiet about Rubin, a friend from his days at the University of Florida. The two were close enough that Rubin was a groomsman in Rutledge's wedding. He warned other friends and former NFL players about Rubin, to no avail.

"They wouldn't listen," he said.

Now, eight years later, FINRA has barred Rubin from the securities industry after 31 NFL players lost about $40 million through his failed investments. Rubin had many of them invest in a newly built Alabama casino that went bankrupt -- and that Rubin had a stake in -- according the FINRA complaint.

Rutledge knows many of the current and former players who have lost a lot of money -- including Fred Taylor, another Glades Central High grad who went on to UF and had a long careeer in the NFL. Other current or former NFL players who invested with Rubin include Plaxico Burress, Terrell Owens, Roscoe Parrish, Santana Moss, Santonio Holmes, Clinton Portis, Mike Peterson and Duane Starks.

Taylor, who now lives in southwest Broward, wouldn't talk to a Sun Sentinel reporter about Rubin, nor about his investments with him.

Neither Rubin nor his West Palm Beach attorney, Patricia Christiansen, could be reached for comment Tuesday. Rubin voluntarily agreed to FINRA's decision to bar him from trading in securities again.

Rubin also has faces civil court cases. Boca Raton attorney Michael Simon has filed two lawsuits -- for Parrish and Owens -- against Rubin and his company. There may be more to come.

Rutledge, who is now working as the athletic director for World Changers Church, a suburban Atlanta megachurch with 30,000 members, said football players -- much like everyone else -- have to make their own financial decisions.

"I learned the hard way coming out of college," said Rutledge, 36. He said he had to fire a financial adviser after making a bad real estate investment. Then, he parted ways with Rubin.

"I was just lucky I didn't get pulled into the traps that catch other players," he added.

It's not uncommon for NFL players to hand over all their non-football activities to agents or advisers. They will pay their bills, make flight arrangements, and hire domestic workers to clean homes and pools, said Pembroke Pines financial adviser Eric Pettus, who represents several professional athletes.

"There's a culture in the NFL with players saying, 'My people do that.' The mindset is to play ball and to do just that," Pettus said.

But ceding that much control over finances can lead to problems, Pettus said.

"You have to have checks and balances," he said. He teaches his athlete-clients, for example, to demand receipts and invoices.

A Sports Illustrated story found that most NFL players either face financial hardships or go bankrupt within two years after retirement. The article blamed bad investments and people taking advantage of players who aren't paying attention to their finances.

But Rutledge said many athletes also go overboard in spending.

"You don't see at 22 that you'll only be in the NFL on average three years," he said.

Former Baltimore Ravens cornerback Samari Rolle, who attended Miami Beach High and played for Florida State University, blamed his financial woes on Rubin in a complaint filed to FINRA.

"Your advice has created a situation in which millions of dollars are unaccounted for and inaccessible," Rolle wrote in a complaint directed at Rubin.

Rolle had directed Rubin to seek investments with "moderate" risk to build a nest egg "so that he would not have to work upon retirement," according to FINRA records.

Instead, Rubin made "unsuitable recommendations" to Rolle to invest most of his available money in "illiquid, high-risk securities," the records show.

Rolle ultimately lost about $3 million, FINRA officials said.

In another FINRA complaint, a Rubin client who was not named alleged that Rubin had disobeyed his investment orders. Rubin "invested the client's money in private placement entities rather than deposit the monies in a variable universal life insurance policy, according to FINRA records.

According to FINRA records, Rubin was being paid as a consultant by the casino sponsors -- beginning in October 2008 -- while he was getting NFL players to invest in the casino. Rubin received a 4 percent ownership stake and $500,000, the records show. Players invested money through March 2011 -- just 10 months before the casino filed for bankruptcy, owing $68 million.

Rubin was later CEO of Resorts Development Group, the parent company of the Center Stage Alabama casino. But he stepped down after he was arrested in September 2011 on drug-related charges.

Now Rutledge thinks he was lucky to get burned early.

"That kind of forced me to learn," he said.

Rutledge said he began studying stocks and bonds. He invested safely in mutual funds. It also caused him to actually read over the financial file that Rubin kept for him.

"I was just doing my due diligence," he said of the 2004 issues.

And now?

"That's pretty sad," about the bankrupt casino and the money all the current investors lost, Rutlege added. "I wish these guys would wake up and just learn how to manage money."

[email protected] or Twitter @donnagehrke.

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