Eleven former Aspiration investors have sued Clippers owner Steve Ballmer, alleging that he used the company to circumvent the NBA salary cap to pay star forward Kawhi Leonard, reports investigative journalist and podcaster Pablo Torre.
According to Colin Salao of Front Office Sports, those investors initially filed suit against Aspiration co-founder Joseph Sanberg and the company – which is now known as Catona – in July, well before Torre began reporting on Ballmer’s investments and Leonard’s apparent “no-show” endorsement deal. The Clippers owner was added to the lawsuit as a defendant on Monday in the wake of that reporting.
“It served Ballmer’s interest in getting extra money to Leonard so he could circumvent the salary cap, beat out the competition and re-sign his team’s superstar player,” the plaintiffs state in their suit. “Ballmer was complicit in and aided and abetted Sanberg’s fraud for his own self-serving purpose. Ballmer publicly endorsed Catona and infused over $50 million into the company. Absent Ballmer’s support, Catona could not have sustained the frauds set forth herein.”
The NBA is currently conducting its own investigation into the accusations of cap circumvention levied against the Clippers, having hired the law firm Wachtell, Lipton, Rosen & Katz to lead that probe.
While the NBA’s investigation is focused on possible violations of the league’s own rules, the lawsuit – filed in Los Angeles – is about recouping losses for investors defrauded by Sanberg, who recently pleaded guilty in federal court to two counts of wire fraud. Skip Miller, an Aspiration investor also serving as counsel for the plaintiffs, issued the following statement to Torre:
“A lot of people have been hurt here. This lawsuit is being brought to recoup their losses. We look forward to our day in court where everything will be aired out and justice will be done.”
For what it’s worth, the allegations made about Ballmer in the lawsuit appear to be based on reporting by Torre and other outlets — the suit doesn’t include a smoking gun or any new revelations. However, it could lead to more new information about the Clippers’ owner’s connection to the company surfacing as the legal process plays out.
“Plaintiffs allege that Ballmer transferred other funds to Catona to keep the company afloat and buy Sanberg’s support, cooperation and silence about the secret deal with Leonard,” the lawsuit reads, per Torre. “The full extent of Ballmer’s transfers of funds to Catona and Sanberg will be ascertained in discovery.”