The U.S. Securities and Exchange Commission (SEC) recently announced fraud charges against a Pittsburgh-based financial adviser accused of taking money without permission from the accounts of several professional athletes in order to invest in movie projects and make Ponzi-like payments.
When SEC examiners uncovered the unauthorized withdrawals that Louis Martin Blazer III made from his clients’ accounts and asked him to explain the transactions, he lied and produced false deal documents that he created after the fact in a failed attempt to hide his misconduct.
The agency alleged that Blazer, who founded Blazer Capital Management as a “concierge” firm targeting professional athletes and other high-net worth individuals as clients, took roughly $2.35 million from five clients without their authorization so he could invest in two movie projects.
Blazer had a personal financial interest in the development of both films, one called “Mafia the Movie” and the other called “Sibling.” In one instance, Blazer actually pitched the movie project to an athlete as an investment opportunity, but that client expressly refused to make the investment. Blazer allegedly took $550,000 from the client’s account anyway and invested the money in the film projects.
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The SEC further alleged that the client later learned about Blazer making the unauthorized investment in the movies and demanded repayment, even threatening a lawsuit. Blazer then took money out of a different athlete’s account to make the repayment in Ponzi-like fashion.
The SEC did not disclose what Blazer will have to pay in the settlement.
Andrew M. Calamari, director of the SEC’s New York Regional Office, commented:
We allege that Blazer grossly abused the trust placed in him by his clients and repeatedly took their money without authorization. And when our examiners put him on the spot, he resorted to false statements and false documents.
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