Lawsuit: Jorge Posada lost $11.2M because of 'egregious and unlawful actions'
Former Yankee Jorge Posada attends the Joe Torre Safe At Home Foundation's 10th Anniversary Gala at Pier 60. (Jan. 24, 2013) Credit: Getty
Former Yankees catcher Jorge Posada has lost $11.2 million because of "egregious and unlawful actions" by his two longtime financial advisers, according to a recent lawsuit.
Posada and his wife, Laura, say in the lawsuit -- which was filed in October in Miami-Dade County Court -- that the two men who acted as their financial advisers for more than a decade mismanaged their investments for their own personal gain.
The Posadas accuse the advisers -- identified in court papers as Juan Carlos Collar and Anthony Fernandez -- of using Posada's money for their own personal real estate and hedge fund ventures without completely disclosing their involvement in the plans or the inherent risks.
"The Posadas were victims of fraud," their attorney, Barry Lax, said Monday. "It's pretty clear from the allegations in the complaint that their registered investment advisers completely breached their fiduciary duties and failed to disclose significant conflicts of interests."
A Yankee from 1995-2011, Posada grossed $117.5 million during his major-league career, according to baseball-reference.com. He is listed in the lawsuit as 44 years old, with a birthday exactly one year earlier than had always been listed during his playing career.
An attorney for the financial advisors, Gustavo Lamelas, said Tuesday that the two sides "have an agreement in principle to settle the litigation and are working to close the deal."
Lax, Posada's attorney, declined to comment on a potential settlement, citing ongoing litigation, and called it "inappropriate" for an attorney to publicly discuss a deal "without a fully executed agreement."
According to the lawsuit, Posada hired Collar and Fernandez as his advisers in the late 1990s when he was just breaking into the majors and they were working for the financial management company Merrill Lynch.
The lawsuit says they left Merrill Lynch in 2005 to create their own investment advisory firm, and Posada went with them.
Shortly thereafter, according to the lawsuit, Posada agreed to invest $3 million in a company created by Collar and Fernandez to develop a high-end equestrian community in Florida, believing they would receive an ownership stake in the land, but that didn't happen.
The lawsuit says that in 2007 Posada invested $8.1 million -- nearly half of his total investment assets -- in a hedge fund the duo created that included steep fees and significant risk, none of which was made known to Posada. The hedge fund has since struggled, costing Posada $4.8 million, according to the lawsuit.
"What these defendants did was just money grabs at every instant," Lax said.
The first hearing is scheduled for Feb. 6.
Jim Baumbach is an award-winning investigative reporter at Newsday, where he has worked since 1998. He spent two decades in the sports department, where he covered every professional team and league, including events such as the Super Bowl and World Series.
