Is NCAA’s Agent For Change Completely Insane?

Last month the NCAA unveiled a blue ribbon panel to “tackle the complex issue of improper agent activity in college sports.”

Jimmy Sexton on NCAA agent panel with Jim Delany and Mike Slive

From NCAA website:

The group has identified opportunities for greater collaboration, including enforcement efforts, potential post-NCAA financial penalties, best practices for the effective enforcement of state agent laws, educational efforts, as well as an examination of the frequency and timing of agent contact with student-athletes.

Some of the biggest names in college and pro sports are on the panel, including Big Ten Commissioner Jim Delany, Southeastern Conference Commissioner Mike Slive, Indianapolis Colts President Bill Polian and Rachel Newman-Baker, the NCAA’s Director of Agent, Gambling and Amateurism.

And agent Jimmy Sexton.

In 2002, Sexton was party to one of the highest-profile cases of a NCAA football star squandering his eligibility perhaps because of his relationship with an agent.

On Jan. 25, 2002, the ASSOCIATED PRESS reported:

Receiver Donte Stallworth should have his eligibility reinstated, despite violating two NCAA rules after declaring himself available for the NFL draft for one day, Tennessee officials told the NCAA.

In a letter dated Jan. 16 and obtained by the Associated Press on Thursday, the university disclosed Stallworth received nearly $1,300 in benefits from an agent after declaring himself available for the draft.

The NCAA has not yet responded to Tennessee’s appeal.

Stallworth, a junior, sent the NFL on Jan. 10 a petition to make himself eligible for the draft early. He changed his mind the next day, and the NFL withdrew his name from the underclassmen draft list before the Jan. 11 deadline.

By making himself available, Stallworth’s eligibility was immediately revoked under NCAA bylaws even though his name was withdrawn.

During those hours his petition remained in effect at the NFL office, Memphis agent Jimmy Sexton bought Stallworth $13.60 in FedEx postage, a $48.60 dinner for two, a $6 ride to the airport, a one-day rental car for $151.92 and a $980 one-way airfare from California to Tennessee for his brother, the letter said.

Stallworth and the university maintained the player didn’t sign a deal to make Sexton his agent and received all the benefits before the Jan. 11 draft deadline. Sexton did not immediately return calls seeking comment. His mother, Donna, a nurse in Sacramento, declined to comment when reached.

Stallworth’s appeal to have his eligibility reinstated was subsequently denied by the NCAA, ending his career at Tennessee.

Tennessee Coach Phil Fulmer said at the time, “It’s discouraging to me that we have a young man who wants to come back to school and do the right thing. …That he digged deep in his own pockets to make the reimbursement.

On Nov. 7, 2004, the MEMPHIS COMMERCIAL APPEAL reported that Tennessee athletic director Mike Hamilton self-reported a SEC rule violation involving agent Sexton .

The SEC passed a rule in May stating that no sports agents are to be allowed on the playing field before, during or after a game. Hamilton said that before the Auburn game earlier this year, Sexton was seen crossing the back of an end zone with a Tennessee administrative staff member to get to the other side of the stadium where he owns a skybox.

Hamilton said. “Jimmy spent about five minutes on the field crossing it. The players were on the field warming up, but he had no contact with them. It was totally innocent.”

Despite what appears to be significant client loss in recent years, Sexton still boasts an impressive list of pro athlete clients. But he’s most known for representing college and pro football coaches like Nick Saban, Lane Kiffin, Frank Beamer, Houston Nutt, Tommy Tuberville, Bill Parcells, Rex Ryan and Tony Sparano.

If you ever wondered how Kiffin landed the Tennessee job out of nowhere, understand that the current USC coach’s most important step in getting the Vols job was soliciting the services of Univ. of Tennessee grad Sexton.

Despite his renown for repping the coaching ranks, Sexton told Memphis Business Quarterly magazine in 2007 that revenue from those relationships only represented about 15 percent of his firm’s total yearly take.

So why then has Sexton taken on so many high profile college coaches?

Is it unreasonable to surmise that perhaps a direct line to a college football coach like Nick Saban might also provide an inside track to those currently populating that coach’s roster?

Last week Sexton renamed his agency to “SportsTrust Advisors.” Long known as “Athletic Resource Management,” Sexton reported the name change as the result of a merger with Pat Dye, Jr.’s agency.

Perhaps it’s a coincidence that the rebranding of Sexton’s agency comes as legal fallout from his former clients over failed investments appears to be reaching a crescendo.

Or not.

Last year the MEMPHIS COMMERCIAL-APPEAL reported:

Jerome Woods and his wife, Dana, were awarded $950,000 in compensatory damages against Morgan Keegan & Co. last week in an arbitration case heard by a regulator of brokerage firms, Financial Institution Regulatory Authority.

Ex-Sexton client Woods, a former NFL player, had alleged that he was mislead by Morgan Keegan brokers about the risk of his investments - which subsequently crashed.

One not-so-small detail: At the time Woods saw his portfolio tank, Morgan Keegan owned Sexton’s agency.

More on Woods:

The former Melrose High School star is among scores of investors who filed claims after they lost about 90 percent of their investments in seven former Morgan Keegan mutual funds.

The three-member panel of arbitrators determined that Morgan Keegan breached a contract, breached client trust and was negligent.

Woods and his wife were not interested in “speculative risk,” said their attorney, Naill Falls of Nashville. “But Morgan Keegan recommended that they invest almost their entire portfolio in junk bond funds that were highly speculative.

“And didn’t disclose the risks that the Woods were being exposed to.”

Darren Heitner of SportsAgentBlog.com wrote in April, 2009 that the Woods case might be the tip of the iceberg for Sexton’s agency thanks to its dealings with Morgan Keegan:

This is a big decision, as many more Morgan Keegan cases involving athlete funds are still left on the dockets. Previous litigation against Morgan Keegan has not resulted in much, if any, of investor funds being awarded.

Sure enough, five months later, former Sexton client Horace Grant won a similar judgement from Sexton company parent Morgan Keegan.

From the MEMPHIS COMMERCIAL-APPEAL:

Former NBA star Horace Grant believes Morgan Keegan is playing keep-away with the $1.46 million he won in an arbitration case, so now he’s seeking another $3 million from the Memphis-based investment bank. 

What’s interesting to note is that nowhere in those two stories is Sexton’s firm mentioned - despite the fact that Sexton’s company was owned by Morgan Keegan when the now-confirmed fiscal negligence involving Grant and Woods took place.

Then there’s the pending cases against former Morgan Keegan brokers John Wilfong and Jimmy Sexton’s brother G. Scott Sexton.

Both were entrusted with client accounts from Jimmy Sexton’s agency, with Wilfong still facing five unsettled financial disputes with clients and Scott Sexton four - all while they were at Morgan Keegan - according to current information provided by the United States Securities and Exchange Commission.

Both Scott Sexton and Wilfong are no longer with Morgan Keegan, exiting after Kiplingers Financial Magazine posted a report in December, 2007, that featured the headline: “Two Morgan Keegan Funds Crash and Burn.

Just how deep is the Morgan Keegan disaster? Just today, MemphisDailyNews.com reported that Memphis University mega sports booster Frank Flautt was also caught in the meltdown:

Frank and Brenda Flautt won more than $1.82 million from Morgan Keegan because of their losses in the funds after filing a claim that asserted breach of fiduciary duty and misrepresentation, among other things. The Flautts had asked for $1.25 million in compensatory damages.

Again, Morgan Keegan, via Wilfong and Jimmy Sexton’s brother, helped invest the vast financial wealth accumulated by Jimmy Sexton’s agency clientele.

There’s no telling who lost what in recent years, but current Sexton agency clients Tim Tebow, Michael Oher, DeAngelo Williams, Peyton Hillis, and Philip Rivers may soon be interested to find out.

So if you were the NCAA, would you invite Jimmy Sexton onto a high-profile panel - next to the SEC and Big Ten Commissioners - charged with “tackling the complex issue of improper agent activity in college sports“?