Retired baseball star Denny Neagle sues Northbrook-based financial adviser
BY ALLISON HORTON Staff Reporter January 10, 2012 12:18AM
Updated: January 10, 2012 11:24AM
Retired baseball all-star Denny Neagle filed a lawsuit Monday claiming that a Northbrook-based financial adviser who was “like a father” to him pilfered money while investing in risky “alternative investments” without his knowledge.
Dennis and his former wife Jennifer Neagle were “utterly unsophisticated” when it came to financial management and investment, and came to William S. Leavitt and Leavitt Capital Management, Inc. for guidance in 1995, according to a suit filed in Cook County Circuit Court.
The Neagles told Leavitt that they needed their money to be placed in conservative and liquid investments such as stocks, bonds and mutual funds, the suit said. Leavitt promised to do so and had full access to the Neagles’ accounts, check-writing privileges and the ability to execute wire transfers on the their behalf.
LCM was the Neagles’ official billing address and paid all of their bills and utilities, the suit said.
“Leavitt became like a father to the Nagles,” the suit said. The Leavitts took vacations with the Neagles as well as attending Denny’s baseball games. “The Neagles trusted Levitt so much” that he was named in their wills as executors of their estates and trustee of some accounts created for the Neagles’ children.
Unbeknownst to the Neagles, Leavitt was allegedly investing the Neagles in hedge funds, private equity funds and other unregulated investments that were incredibly risky, illiquid, and laden with fees, the suit said.
The suit claims that at one point Leavitt placed 80 percent of the Neagles’ investment portfolio in these “alternative investments.”
The suit claims the Neagles were made aware of Leavitt’s actions when someone visiting their home in the late 2000s happened to notice and question one of the subscription agreements.
The suit claims the Neagles also paid taxes on “phantom income,” incurred huge losses in failing “alternative investments,” cannot now access most of their financial portfolio because it is locked in illiquid “alternative investments” and must pay substantial “capital calls” or cash infusions in the thousands of dollars for investments that yield no long-term investment payoff.
The five-count suit claims breach of fiduciary duty, negligent misrepresentation and unjust enrichment. It seeks a jury trial, damages, accounting of all “alternative investments,” return of all amount paid by the Neagles for the investments as well as any compensation received, and court costs.
Leavitt was not available for comment Monday evening.
Neagle, who debuted in the major leagues in 1991, was last under contract with the Tampa Bay Devil Rays in 2005.