The Securities and Exchange Commission filed fraud charges against a Pittsburgh-based financial adviser accused of taking money without permission from the accounts of several professional athletes to invest in movie projects and make Ponzi-like payments.
According to the SEC’s complaint, 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 SEC alleges that Blazer, who founded Blazer Capital Management as a “concierge” firm targeting professional athletes and other high-net worth individuals as clients, took approximately $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.
The SEC further alleges 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.
“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,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.
Blazer has agreed to settle the charges without admitting or denying the allegations. The settlement is subject to court approval with determination of disgorgement and financial penalties to be decided by the court at a later date.