How Triton Financial used athletes to attract clients, defraud investors
Triton Financial, an Austin, Texas-based investment firm which boasts prominent ties to the sports world -- including a sponsorship deal with the Heisman Trophy Trust; a three-year contract for a PGA Champions Tour event, the Triton Financial Classic; and a roster of former Heisman Trophy winners and NFL players that were employees of the company -- has been sued in a civil action by the U.S. Securities and Exchange Commission for defrauding investors in a multimillion-dollar insurance scam, according to documents filed yesterday at Austin federal court. In connection with the complaint, Triton and its CEO,
The SEC complaint alleges that Triton and Barton had raised more than $50 million for at least 40 limited partnerships since 2004, and that the firm's insurance vehicle at the center of the complaint, Triton Insurance, had raised roughly $8.4 million from 90 people.
"Mr. Barton has consented to a receivership, which essentially means that the receiver now takes over the business,"
Barton could not be reached for comment on his cell phone yesterday. His attorney,
SI.com has also learned that Triton is the target of a separate class-action lawsuit that was filed on Dec. 14 and newly amended yesterday in Travis County (Texas) District Court. The suit alleges that Barton solicited $12 million from investors, including the named plaintiff,
"What we know is that people trusted their entire financial future to this man and to this company," says
According to the SEC, the government investigation began after SI first investigated Triton in
Once the Texas State Securities Board (TSSB) began looking into Triton -- which had been registered as an investment adviser since 2006 -- and requesting documents and information, the SEC complaint says that Barton sent the TSSB "altered and fabricated documents" in an attempt to "conceal the true number of investors and the true amounts of funds raised." The TSSB's own hearing will be held on Feb. 25, 2010.
The SEC complaint also notes that Triton "made most of its offerings through personal contacts," utilizing a sales force that employed football players -- all of whom conspicuously left the company in recent months. Galloway and the SEC's complaint both declined to specifically accuse any salesmen of wrongdoing, but
Former employees include Heisman Trophy-winning quarterback
"Ty only learned of the SEC's interest in Triton a few weeks ago, and has assisted the agency in its investigation," Ty Detmer's lawyer,
Messages left with Blake, Weinke, Dorsett and Tuckfield yesterday have not been returned.
The lawsuits are the latest chapter in a saga that has been filled with deception and drama. On the afternoon of Dec. 11, a distressed Triton investor,
A week before that, on Dec. 4, Travis County court records show that Cayton had filed her own lawsuit alleging that Triton had committed statutory fraud in March by using "false representations of fact" and "false promises" to convince her to invest her family's $125,000 life savings. Cayton also claims that Triton began purposefully avoiding her questions and only arbitrarily sent her dividends.
"Hopefully, [Cayton] will receive the proper treatment and counseling necessary to prevent this from happening again," Barton would later say in a statement. "We would like to take this opportunity to assure our clients that we will continue to provide the same great level of service that they received prior to this unfortunate event."
Says one of Cayton's securities lawyers,
On Oct. 21, 2008, at an event celebrating Triton's newly announced sponsorship deal with the PGA Champions Tour, money didn't seem to be a problem. Barton was called
But just last month, the
Publicly, Triton blamed the economic climate. "What I hope is going to happen is that the event will continue here, because I think it's a great event,"
"There's a perception that if pro athletes invest with a certain company or promote it, that there's some kind of respectability to it," says Dallas-based financial adviser
Another fact worth noting is Barton's own background. According
But Colorado State University's records office tells SI.com that Kurt Branham Barton, whose date of birth matches that of Kurt Branham Barton, CEO of Triton Financial, never actually graduated from the school, though he did attend from the fall of 1987 to the spring of 1991. (The records offices at CSU-Global, Colorado State's online school, also does not produce any record of a Kurt Barton; nor does that of CSU-Pueblo, the separate but similarly named institution.)
On March 30, 2007, the year before Triton became
By year's end, the images and bios of former college stars such as
Panko and Lindberg, who were ousted from the company in the spring of 2008, filed a breach of contract claim on July 14 of that year alleging that Triton failed to fulfill the terms of their purchase agreement (primarily concerning proposed financial compensation and the degree of control retained over the company). The case is set to go to trial on April 4, 2010.
Meanwhile, the HWA had its own objections with Triton stemming from unpaid funds, and on Aug. 1 of this year ultimately reached a settlement of $50,000 with the company that was to be paid by Aug. 20. But documents filed in Travis County court yesterday claim that the HWA was never paid by Triton and has now filed a motion to enforce that settlement.
A year before that, in August 2007, Triton also opened "
"It was a total flop," says
A message left on Campbell's cell phone earlier this week has not been returned.
Triton, though, continued to tout itself as a favored investment firm among football players. Detmer, Blake and Barton estimated to SI in March that the number of pro athletes who were Triton clients was 30, 70 and 100, respectively. But several former employees who requested anonymity due to ongoing legal proceedings say that the sports sponsorship deals and football players Triton employed most effectively served to boost the confidence of everyday, non-athlete investors.
In fact, at least according to a mailing list of Triton's current investors that was accidentally e-mailed out to clients by Barton on Oct. 30 (and obtained by SI), Triton manages a total of 335 separate accounts. But of those 335, only 12 appear to be current or former pro athletes (all from the NFL). And after Ty Detmer, Koy Detmer, Tony Dorsett and Chris Weinke are subtracted, only eight players -- the first four of whom are Philadelphia Eagles -- remain: quarterback
Messages left with those players this week have not yet been returned.
One of those everyday, unsophisticated investors lured by such bold-faced names and faces was Christine Cayton.
Cayton, the wife of a pipe designer, had been reading self-help finance books by
"It was like meeting superstars or something," Cayton says of her first visits to Triton. "[Triton employees] asked me, 'Do you know what the Heisman Trophy is?' And I thought to myself, They've got millions. Why would they ever want to do something that would hurt their name or their reputation with my little dinky money?" Cayton says she had a cell phone photo taken with two quarterbacks, Ty Detmer and Jeff Blake, the day she agreed to invest all of her family's $125,000.
But after making the investment, Cayton alleges in her lawsuit, she stopped hearing from Triton. No updates. No dividend checks. After writing a series of letters to the company and repeatedly showing up at the offices herself, Cayton says she threatened to hire a lawyer and contact the Texas State Securities Board if she didn't get her money back. Cayton then says she was personally handed a partial refund check for $25,000 by Chris Weinke. According to one e-mail Cayton saved that was shown to SI.com, Kurt Barton later pledged to refund the rest by Dec. 4, at which point "mutual releases would be signed."
Dec. 4 came, but her money didn't. So she filed her lawsuit. And then -- after one more week of waiting -- she
On the Triton Financial Web site, memorably, there had once been a video interview with a grinning Ty Detmer, who, months after leaving the company, became a
"For us, it's more than a job. It's putting your reputation on the line that this is a solid company. And you know I wouldn't be involved if I didn't feel really good about it."