Far out Friday: Advisers get it tough from celebrities

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Count yourself lucky that you’re not working in Hollywood; these seven celebs have collectively tried to claim US$80m by suing their financial advisers:

Nicholas Cage

The National Treasure actor blamed his ex-financial planner Samuel Levin for a US$6.26m tax lien in 2009, after he failed to pay income tax on wages dating back to 2007.

In a lawsuit filed against Levin in Los Angeles County Superior Court, the star claimed he was misled over his monetary situation over a period of seven years, while being "grossly" overcharged for his services.

The legal documents stated, "Levin placed Cage in numerous highly speculative and risky real estate investments, resulting in Cage suffering catastrophic losses."

Levin filed a counter-complaint and responded to the lawsuit, stating that he warned Cage that he was living beyond his means and urged him to spend less. Levin's filing states that "instead of listening to Levin, cross-defendant Cage (Coppola) spent most of his free time shopping for high ticket purchases, and wound up with 15 personal residences".

The case was settled out of court.

Gary Coleman

In 1989, Gary Coleman sued his foster parents and former business adviser for US$3.8m over misappropriation of his trust fund, and won a US$1,280,000 judgment in 1993; only to declare bankruptcy a decade later

He said multiple people were responsible for his insolvency, "...from me, to accountants, to my adoptive parents, to agents, to lawyers, and back to me again."

Ongoing medical expenses contributed significantly to Coleman's chronic financial problems, and compelled him, at times, to resort to unusual fundraising activities. In 2008, for example, he auctioned an autographed pair of his trousers on eBay to help pay his medical bills.

Mike Tyson

Boxing Hall of Fame member and former heavy weight champion Michael Tyson and his wife, Lakiha Tyson, have filed suit against a financial adviser and his company for US$5m in damages, according to papers filed in Los Angeles Superior Court.

The Tysons are suing SFX Financial Advisory Management Enterprises Inc., a financial planning firm with a reputation for handling entertainment and sports figures. They have also named Live Nation Entertainment Inc., of which SFX is a subsidiary, and Brian Ourand, the person at SFX who handled their account, according to F-A Mag.

Ourand allegedly embezzled US$300,000 from the Tysons when he was supposed to be handling the Tyson’s bankruptcy filing. The suit says SFX removed Ourand from the account and assigned a new person without immediately informing the Tysons of the change or of the embezzlement.

Black-eyed Peas members

Black Eyed Peas members Will.i.am, Taboo and Apl.de.ap filed suit against their former financial adviser last year, accusing him of costing them over US$3m.

The trio claimed Sean M. Larkin failed to file state and federal income tax returns on their behalf between 2002 and 2009.

A lawyer representing the three pop stars said Larkin "falsely represented… on numerous occasions that he was taking care of everything and that they had nothing to worry about."

The band members confronted Larkin after they discovered they had massive tax bills in 2009, and he assured them he would file the delinquent returns and cover all the costs. But, the suit alleges that "Larkin's representations proved to be false."

Patricia Cornwell

Patricia Cornwell, the writer who sold more than 100 million books featuring medical examiner Dr Kay Scarpetta, just won a US$50.9m lawsuit against a firm of financial advisers and a business manager.

The court heard that Cornwell examined her finances in 2009. At that point she had earned an eight figure income each year for the previous four years, but discovered she was left with just US$13 million.

She fired the firm in question, Anchin, Block and Anchin – a New York accounting company – and sued the company and Evan Snapper, one of its former principals, for negligence and breach of contract. Her case claimed that Anchin had borrowed millions in her name without telling her, and had moved yet more of her fortune from low-risk to high-risk investments, without her permission, according to the Guardian. She also claimed that she found a cheque that she had not authorised for £5,000 as a bat mitzvah gift for Snapper's daughter.

Terrell Owens

Former NFL wide receiver Terrell Owens is suing a financial adviser, a South Florida bank and others for mismanaging his finances, according to documents obtained by Yahoo! Sports.

Owens claims in the filing:

That financial firm Pro Sports Financial (PSF) opened an account at Florida-based Bank Atlantic without his knowledge or authorization

That Owens' signature on that account was forged

That PSF employee Tequilla Harris and others made "numerous unusual and extraordinary withdrawals" from that account without Owens' authorization

That PSF, Rubin and others introduced him to "illegal and highly risky investments" such as a failed casino project in Alabama without properly researching the investments or providing ample risk and assessment disclosures

Vin Baker

Former NBA player Vin Baker, who lost his Durham home and Old Saybrook business to foreclosure accused his longtime financial adviser of mismanaging millions of dollars of his money.

Baker has filed an eight-count lawsuit against Donald S. Brodeur Jr. and Brodeur & Co. Certified Public Accountants, seeking damages including a prejudgment remedy of US$12m.

According to the lawsuit filed in Superior Court in Middletown, Baker says Brodeur and the accounting firm "advanced their own interests to the detriment of mine, and breached their fiduciary responsibilities, obligations, and duties imposed on them by engaging in … dishonest, disloyal and immoral conduct."

Brodeur called Baker's allegations "unfounded." Brodeur said he worked closely with Baker's parents throughout the years and that his firm was "just one aspect" of Baker's financial team. "He had other business advisers," Brodeur said.

Do you think celebrities are putting themselves at risk by using unqualified financial advisers?