SEC Investigating Former 49ers' Firm

Ronnie Lott and Harris Barton's company accused of impropery shifting funds.

Monday, Nov 28, 2011  |  Updated 11:08 AM PDT
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SEC Investigating Former 49ers' Firm

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Former San Francisco 49er Ronnie Lott speaks to the crowd as he has his #42 jersey retired during a halftime ceremony during the Pittsburgh Steelers v San Francisco 49ers game.

A defunct investment firm run by former 49ers greats Ronnie Lott and Harris Barton has caught the attention of the federal government.

The U.S. Securities and Exchange Commission is investigating HRJ Capital LLC., formerly run by Lott and Barton, about whether the company knowingly misled investors in 2008 as it struggled to stay solvent.

The former 49ers founded the company in 1998 and it invested $2.8 billion in venture capital and leveraged buyout funds for public pension systems and star athletes.

Indianapolis Colts quarterback Peyton Manning was one of the group's clients.

Bloomberg reports the issue centers around the following:

In early 2008, during the worst financial crisis in decades, HRJ had more than $300 million in unfunded commitments to buyout funds when it received capital calls to make good on its pledges, according to company records. As Bloomberg Markets magazine reported in February, HRJ was unable to raise cash to meet those obligations and service loans from Silicon Valley Bank, a unit of Santa Clara, California-based SVB Financial Corp.

The SEC is investigating whther the company and its senior managers illegally shifted debt to investors to try to meet those capital calls.

Lawyers for the SEC have been conducting interviews for their investigation since April.

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