There might be some big-time celebrities with Stanford money after all. That’s because Teddy Forstmann’s management group IMG encouraged some of its clients to have money managed by Stanford. Why would they do this? Kickbacks.
New York Post: According to three sources with knowledge of the situation, IMG and Stanford have a quid-pro-quo agreement under which Stanford Financial pays IMG a low- to mid-seven-figure consulting fee in exchange for IMG advising its clients – which include golfers Tiger Woods, Arnold Palmer, David Toms, Sergio Garcia and others – to have their money managed by Stanford.
The backroom bargaining has exposed IMG to charges of double-dealing, and is raising questions about where the firm’s allegiances lay: with Stanford Financial or its athlete clients.
This is a variation on a common racket across finance. We saw it with Madoff where funds of funds would charge their clients fees to invest with Madoff, but then get kickbacks from the Ponz himself. Even when there’s no fraud, this type of thing happens.
But if we were Tiger or Arnie, even if we hadn’t lost any money, we’d be pretty pissed to find that the firm had this kind of arrangement. Why are Tiger and Arnie paying IMG for their services, when IMG’s services are being bought and paid for by a third party. Who is IMG serving?
For what it’s worth, IMG is denying the story.