Drew Bledsoe loses on technology investment
In 2008, former NFL quarterback Drew Bledsoe and some other current and former players sued UBS Securities LLC and UBS Financial Services Inc. Bledsoe invested in a startup company called Pay by Touch through UBS, according to lawsuit filed by the players in Superior Court in San Francisco.
Bledsoe and the other plaintiffs allege that UBS concealed the past legal troubles of the founder of Pay By Touch. Pay By Touch was developing technology to allow people to use a fingerprint to pay for things with a credit card rather than having to actually swipe the card.
"(John P.) Rogers had such a detailed history of criminal and civil misconduct and tax evasion prior to his involvement with Pay By Touch that any knowledge of this would have warned investors," the lawsuit states.
There are plenty of stories of companies that make a great business pitch to investors, claiming their company will be the next Google, Chasnoff says. But before you know it, the business closes down and you can't find the people who organized it.
An investor's financial advisers should do a thorough job vetting startup companies seeking an investment, he says. A key red flag is whether an adviser is being compensated for presenting an investment opportunity to his client. That's a major conflict of interest, Chasnoff says.