Financial planning firm dragged into NBA union firestorm

Union chief Hamilton requests resignation from Prim Capital; accusations of nepotisim

Jan 29, 2013 @ 1:40 pm

NBA
+ Zoom

Billy Hunter, executive director of the National Basketball Players Association, purged family members from union roles after a report was critical of nepotism at the organization.

The moves dismissing personnel including his daughter and daughter-in-law were disclosed in a letter from Hunter to members of a special committee of players established prior to the investigation by the law firm Paul, Weiss, Rifkind, Wharton & Garrison. A copy of the letter, dated Jan. 23, was obtained by Bloomberg News.

Hunter also secured a letter of resignation from Prim Capital, a Cleveland-based firm that reportedly provides financial-planning seminars for N.B.A. players.

The New York-based union paid almost $4.8 million to Hunter's family members and their professional firms since 2001, according to public records. Hunter makes $3 million a year as union chief.

“Hopefully this decision will alleviate any concerns raised by their employment,” Hunter wrote in the letter. “These measures are being taken although the report noted that both of them were highly qualified, not overpaid, and were contributing members of the NBPA staff.”

Robyn Hunter, the director's daughter, ceased working at the union on Jan. 25, according to the letter. Megan Inaba, his daughter-in-law and director of special events and sponsorships, will leave on Feb. 17 after the National Basketball Association's All-Star weekend.

Prim Capital

Hunter, 70, also secured a letter of resignation from Prim, which employs his son, Todd. According to USA Today, the NBPA paid Prim, a Cleveland-based financial planning and investment company, $576,824 from July 1, 2010 to June 30, 2011.

Hunter, through union spokesman Dan Wasserman, declined to comment on the letter or his family's employment changes.

Joe Lombardo, Prim's managing director, didn't immediately return a voice message left at his office seeking comment on the company's contract with the union.

The changes come about two weeks after the independent investigation of the union's business practices found that Hunter, the organization's leader since 1996, put personal interests ahead of the association, failed to manage conflicts of interest, and didn't have proper approval for his five-year, $15 million contract as director.

The investigation by Paul, Weiss also concluded that Hunter didn't do anything illegal. It said players should consider a change in leadership. The report also said players could decide it was possible for Hunter to rectify the problems he created and serve as an effective executive director.

Hunter's letter to the committee, comprised of James Jones of the Miami Heat, Matt Bonner of the San Antonio Spurs, Anthony Tolliver of the Atlanta Hawks and Matt Carroll and Etan Thomas, who aren't currently on rosters, also said the union would adopt policies related to conflicts of interest, hiring and document retention.

Jobs Eliminated>

Hunter said in the letter he would eliminate unspecified positions at the union and adjust the salaries of others to bring them in line with market rates.

Arn Tellem, one of basketball's most prominent agents, sent a letter to his clients last night that said Hunter must be fired as head of the association. He accused Hunter of “treachery” in the letter, a copy of which was obtained by Bloomberg News. Tellem is the first agent to call for Hunter's ouster.

“Mr. Hunter works for you, though he clearly doesn't realize it,” Tellem said in the letter.

Players' Interests

Hunter in a statement said he has always looked after the players' interests, even when some agents haven't. He didn't name specific agents.

“The reality is that the agents have never been satisfied that they cannot control the union for their own agendas,” the statement said.

The U.S. Attorney's Office in Manhattan started investigating the union after the association's president, Derek Fisher, called for a review of business practices, including nepotism.

Besides Hunter's son, daughter and daughter-in-law, another daughter, Alexis, is special counsel at a law firm used by the union. Hunter's letter didn't refer to Alexis Hunter.

The Paul, Weiss report stated that Prim Capital didn't cooperate with its investigation.

According to the union's most recent filing with the U.S. Department of Labor, Robyn Hunter received a salary of $89,695 last year. Inaba received $167,100, while Prim, which conducted financial education seminars for NBA players, was paid $594,900.

Steptoe & Johnson, the firm that employs Alexis Hunter, was paid $296,246.

--Bloomberg News

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Apr 30

Conference

Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video

INTV

Mercer's Cara Williams: How to achieve gender parity in the financial advice industry

The financial advice industry can learn from companies and countries that are well on their way to achieving 50/50 gender parity, according to Cara Williams, global wealth leader for the multinational client group at Mercer.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Wealth management firms struggle with lower fees, fewer new clients

Advisers in North America earned less from clients last year and saw a decline in average fees, according to a new report by PriceMetrix.

These investors are allowed to put $500K into a Roth IRA at once

The HEART Act permits rolling all or part of life-insurance and combat-related-fatality payouts directly into the tax-free retirement plan, but few take advantage.

Labor's Alexander Acosta and SEC's Jay Clayton tell lawmakers they will work together on fiduciary rule

In separate appearances before Senate panels, the regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding.

Brian Block denies cooking the books at Schorsch REIT

Former CFO claims everything he did was 'appropriate' and 'correct.'

Interns will take on several roles at advisory firms this summer

College students are helping with client prep, firm visioning and long-term projects, among other duties.