Having Celebrity Clients Not All Fun and GamesPosted by in Blog on November 9, 2011
Being a financial advisor, especially for sports stars, seems like it would be a dream job. But for two New Jersey advisors, it turned into a real nightmare.
RegisteredRep.com has the story of Steven Kolinksy and Stephen Hill, who once advised a virtual roster of Major League Baseball players, including David Wright, Cliff Floyd, Rondell White, Todd Hundley, and Gregg Jeffries. But the financial advisors’ world was shattered in 2010 when Floyd and White sued the pair for $12.5 million in damages over a $2.5 million New Jersey real estate deal gone bad.
First Sports Illustrated picked up on the story, then the rest of the national press went after Kolinsky and Hill, and then New Jersey regulators from the state’s Bureau of Securities pursued the pair. Both ended up having to pay fines, and Hill’s license was suspended. But some claim that they got tougher treatment because they had disputes with celebrity clients.
“One legal source said it was unusual for the Bureau of Securities in New Jersey, a governmental agency, to take its action in the Kolinksy and Hill case,” RegisteredRep.com reports. “‘What you had here was in my opinion extraordinary,’ said the source. ‘You really only had two people who had sued. It was a private dispute. It wasn’t in the public interest to waste taxpayers dollars.’” The inside source said that “Some would say it was an opportunity for the bureau chief to pander to the press. He got a ton of profile out of the case.”
RegisteredRep.com says that “the case of Kolinsky and his partner illustrates one potential downside of an advisory practice that caters to celebrities: Some reporters are star-struck if the story concerns a famous ballplayer or Academy Award winner. They know that in a culture obsessed with celebrity, stories about stars who’ve been wronged will excite readers.” The article advises financial advisors to “watch your back” when it comes to dealing with celebrity clients.
Written By Lisa Swan