Five-time MLB all-star sues UBS, ex-rep for $7.6M

Ex-slugger Mike Sweeney claims adviser cost him nearly $5M by moving his money into private placements

Jul 9, 2013 @ 4:01 pm

By Dan Jamieson

Mike Sweeney, a five-time Major League Baseball all-star, has sued UBS Financial Services Inc. and his former broker at the firm for $7.6 million in damages.

The suit, alleges that Mr. Sweeney's broker at UBS, Ralph A. Jackson III, invested half of his multimillion-dollar portfolio in a series of risky private placements that subsequently turned sour.

He was introduced to Mr. Jackson in 1997 or 1998 when Mr. Jackson was with Salomon Smith Barney, according to the suit. Mr. Sweeney was making about $200,000 a year at the time, but hit it big when he signed a multimillion-dollar contract with the Kansas City Royals for the 2001 and 2002 baseball seasons.

As an unsophisticated investor, he was “heavily reliant” on Mr. Jackson to invest his money conservatively, the claim alleges.

In January 2002, when Mr. Jackson moved to UBS, Mr. Sweeney's portfolio was 73% invested in municipal bonds, in addition to some large-cap stocks, according to the suit. Over the next five years, however, Mr. Jackson put $6.85 million of his portfolio into 11 private-equity investments that were misrepresented as safe and suitable, ultimately losing $4.9 million, the suit alleges. Mr. Sweeney also claims that Mr. Jackson moved another $2.7 million into two private-equity investments without his knowledge.

Mr. Jackson joined Morgan Stanley in 2008.

Mr. Sweeney's attorney, Marc Zussman of the Law Offices of Marc I. Zussman, said the case was filed in court instead of arbitration because the case falls outside of the Financial Industry Regulatory Authority Inc.'s six-year eligibility rule.

A statute of limitations does apply to the court case, Mr. Zussman said, “but we believe we will not be barred by [the time limit] because [Mr. Sweeney] didn't uncover the fraud until recently.”

A message left for Mr. Jackson Tuesday was not returned.

UBS spokesman Gregg Rosenberg declined comment.

The firm and Mr. Jackson have not yet responded to the charges, according to court filings.

Mr. Sweeney, 39, now lives in San Diego. He is involved in charitable youth baseball camps and does speaking engagements, according to the complaint.

In 1991, Mr. Sweeney was drafted by the Royals right out of his Ontario, Calif. high school. He played his first 13 major league seasons with the Royals -- mostly as a first baseman -- and later played with the Oakland Athletics, Seattle Mariners and Philadelphia Phillies before retiring in March 2011, according to the Baseball Almanac.

In his 16-season major league career, Mr. Sweeney's batting average was .297 with 215 home runs and 909 runs batted in. He was a five-time all-star, according to SportingNews.

News of Mr. Sweeney's lawsuit, which was filed last month in Los Angeles Superior Court, was reported earlier by Courthouse News Service.

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