Welcome Guest
Log In | Register )
The time is now 10:42 am
You last visited November 23, 2014, 10:42 am
All times shown are
Eastern Time (GMT-5:00)

Lottery winner sues advisors for poor policies

After the Big WinAfter the Big Win: Lottery winner sues advisors for poor policies
55
Rating:

What do you buy when you win the lottery? An exotic new car? Likely. A sprawling luxury home? Sure.

Life insurance? Not so much.

A young, unmarried grocery store worker, with no children, won half of a $336 million Mega Millions jackpot and did just that: bought a $100 million life insurance policy. Now he is suing the financial advisors who sold him the policy, along with other investments that encouraged him to "assume tens of millions of dollars in debt," according to the Courthouse News Service.

Kevyn Ogawa won the lottery back in 2009, taking a lump-sum cash payout and netting $70 million, after taxes. Shortly thereafter he began investing with two financial advisors, who were also attorneys and insurance agents. They convinced Ogawa to buy four policies from four companies, telling him he could "earn $50 million by the time he was 50 years old," the complaint states. Ogawa says the agents made $1million in commissions from the sales, exploiting the fact that he "knew nothing about life insurance."

The complaint adds: "Kevyn, a young unmarried man with no children, no siblings and only one living parent, had no need for so much life insurance. Kevyn stood no chance to benefit from the insurance financially since he was not named as a beneficiary of the trust that owned the policies."

But the alleged bad investments didn't end there, according to the lawsuit.

"The duo additionally encouraged Kevin to open a line of credit and borrow the money necessary to purchase several expensive pieces of real estate, including a $10 million beachfront property in Malibu. This strategy saddled Kevyn with $27 million in debt."

Two years later, Ogawa says, the defendants attempted to persuade him to exchange his existing life insurance policies for a single $600 million policy. That's when, after conferring with another advisor, Ogawa learned that his existing policies were "highly unsuitable for him and [were] funded in a way that would provide him no potential benefit and would leave the trust liable for large amounts of gift tax."

The claim says Ogawa finally surrendered the policies after paying nearly $2 million in premiums. He is seeking damages for breach of fiduciary duty and professional negligence.

Yahoo Finance

We'd love to see your comments here!  Register for a FREE membership — it takes just a few moments — and you'll be able to post comments here and on any of our forums. If you're already a member, you can Log In to post a comment.

70 comments. Last comment 1 year ago by rdgrnr.
Page 1 of 5
Win$500Quick's avatar - Lottery-050.jpg
Florida
United States
Member #77815
August 1, 2009
3288 Posts
Offline
Posted: September 27, 2013, 1:36 pm - IP Logged

When you are dreaming about winning the lottery. Take a minute to also dream about maintaining your good fortune. Lottery winners are easy prey because con artist will say " It's not like you earned it!"

Numbers Don't Lie!

    noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
    Bay Area/ California
    United States
    Member #136482
    December 12, 2012
    2125 Posts
    Offline
    Posted: September 27, 2013, 1:37 pm - IP Logged

    What do you buy when you win the lottery? An exotic new car? Likely. A sprawling luxury home? Sure.

    Life insurance? Not so much.

    A young, unmarried grocery store worker, with no children, won half of a $336 million Mega Millions jackpot and did just that: bought a $100 million life insurance policy. Now he is suing the financial advisors who sold him the policy, along with other investments that encouraged him to "assume tens of millions of dollars in debt," according to the Courthouse News Service.

    Kevyn Ogawa won the lottery back in 2009, taking a lump-sum cash payout and netting $70 million, after taxes. Shortly thereafter he began investing with two financial advisors, who were also attorneys and insurance agents. They convinced Ogawa to buy four policies from four companies, telling him he could "earn $50 million by the time he was 50 years old," the complaint states. Ogawa says the agents made $1million in commissions from the sales, exploiting the fact that he "knew nothing about life insurance."

    The complaint adds: "Kevyn, a young unmarried man with no children, no siblings and only one living parent, had no need for so much life insurance. Kevyn stood no chance to benefit from the insurance financially since he was not named as a beneficiary of the trust that owned the policies."

    But the alleged bad investments didn't end there, according to the lawsuit.

    "The duo additionally encouraged Kevin to open a line of credit and borrow the money necessary to purchase several expensive pieces of real estate, including a $10 million beachfront property in Malibu. This strategy saddled Kevyn with $27 million in debt."

    Two years later, Ogawa says, the defendants attempted to persuade him to exchange his existing life insurance policies for a single $600 million policy. That's when, after conferring with another advisor, Ogawa learned that his existing policies were "highly unsuitable for him and [were] funded in a way that would provide him no potential benefit and would leave the trust liable for large amounts of gift tax."

    The claim says Ogawa finally surrendered the policies after paying nearly $2 million in premiums. He is seeking damages for breach of fiduciary duty and professional negligence.

    That is why it is important to vet more than one Attorney,  financial advisor etc, both parties are to blame here. His naivete, and their brazen attitude.
    Sue them and learn a lesson from this Ogawa. You don't marry the first person you kiss dum $$ s.

      dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
      Oklahoma
      United States
      Member #82391
      November 12, 2009
      5482 Posts
      Offline
      Posted: September 27, 2013, 1:43 pm - IP Logged

      They say always have two lawyers and two accountants that way one can keep an eye on the other Wink

      I Love Pink & Green 1908

        dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
        Oklahoma
        United States
        Member #82391
        November 12, 2009
        5482 Posts
        Offline
        Posted: September 27, 2013, 1:52 pm - IP Logged

        From what I just read about Mr. Ogawa(google his name) he does not seem to be an honest man himself. Seems he was to share his winnings with two friendsNo No

        I Love Pink & Green 1908

          LottoGuyBC's avatar - Lottery-050.jpg
          British Columbia
          Canada
          Member #116105
          September 4, 2011
          3638 Posts
          Offline
          Posted: September 27, 2013, 1:57 pm - IP Logged

          I'll be my own advisor Smash

          "You have to be in it to win it!"

            RJOh's avatar - chipmunk
            mid-Ohio
            United States
            Member #9
            March 24, 2001
            18020 Posts
            Offline
            Posted: September 27, 2013, 2:06 pm - IP Logged

            From what I just read about Mr. Ogawa(google his name) he does not seem to be an honest man himself. Seems he was to share his winnings with two friendsNo No

            Not sharing his lottery winnings with his friends doesn't make him dishonest.  I suspect friends and families of lottery winners always expect to share their winnings even if they never contributed a penny toward the cost of their winning ticket.

            * you don't need more tickets, just the right ticket * 
            * your best chance at winning a lottery jackpot is to buy a ticket * 
                 Wink 

              helpmewin's avatar - dandy
              u$a
              United States
              Member #106669
              February 22, 2011
              17814 Posts
              Offline
              Posted: September 27, 2013, 2:26 pm - IP Logged

              I'll be my own advisor Smash

              I Agree! Best advice everParty

                               

                maringoman's avatar - kobold
                Massachusetts
                United States
                Member #37433
                April 14, 2006
                2163 Posts
                Offline
                Posted: September 27, 2013, 2:46 pm - IP Logged

                A young, unmarried grocery store worker, with no children, won half of a $336 million Mega Millions jackpot and did just that: bought a $100 million life insurance policy. 

                When you intend to do something that you have no know-how and are too lazy to learn then tragedy is what you get. Personally I would have bought municipal bonds from a thriving state such as Florida. They are tax free too. 

                 

                 9/27/2013.

                 

                AAA RATED

                 

                ISSUEMaturity 
                Range
                TodayLast 
                Week
                National10 Year2.702.90
                National20 Year4.004.15
                National30 Year4.454.60
                Florida30 Year4.404.50

                When you win the lottery, you have a lot of work to do before you can rest easy.

                It's a futile effort.

                  Piaceri's avatar - sarsony1
                  Wannabe Won Percenter
                  Republic of Texas
                  United States
                  Member #57557
                  January 9, 2008
                  1004 Posts
                  Offline
                  Posted: September 27, 2013, 3:15 pm - IP Logged

                  The guy's a dunce, and he got taken. It was too bad he didn't get better advice from outside the first firm. He failed to do his homework. As to his supposed to be sharing... karma karma karma.

                   

                  For that kind of win: 1 large legal firm specializing in high value clients, 1 wealth management firm, 1 CPA firm specializing in high value clients, and 1 local legal firm to watch them all. Kinda like Lord of the Rings.  And don't necessarily go with the firms recommended by the others. Do your homework.

                  face

                  singlewinnersinglewinnersinglewinner   

                    dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
                    Oklahoma
                    United States
                    Member #82391
                    November 12, 2009
                    5482 Posts
                    Offline
                    Posted: September 27, 2013, 3:44 pm - IP Logged

                    Not sharing his lottery winnings with his friends doesn't make him dishonest.  I suspect friends and families of lottery winners always expect to share their winnings even if they never contributed a penny toward the cost of their winning ticket.

                    What I read Ogawa did not buy the ticket one of the friends did he bought 3 tickets and distributed one to each member. Also after he won he had the friends sign a purported release agreement. The agreement states there was an agreement to share the Lottery jackpot, but only provides that the friends will receive $1 million(which one of the friends claims he has not received).

                    I Love Pink & Green 1908

                      HaveABall's avatar - rocket

                      United States
                      Member #72448
                      March 18, 2009
                      1008 Posts
                      Offline
                      Posted: September 27, 2013, 3:50 pm - IP Logged

                      The guy's a dunce, and he got taken. It was too bad he didn't get better advice from outside the first firm. He failed to do his homework. As to his supposed to be sharing... karma karma karma.

                       

                      For that kind of win: 1 large legal firm specializing in high value clients, 1 wealth management firm, 1 CPA firm specializing in high value clients, and 1 local legal firm to watch them all. Kinda like Lord of the Rings.  And don't necessarily go with the firms recommended by the others. Do your homework.

                      I Agree!, Piaceri, I hope this winner will recover well. 

                      Anyhow, it's time for this big jackpot winner to buy a high-speed home Internet connection, a laptop computer, and start searching at least 1 hour per day for things he thinks he understands AND doesn't understand (BEFORE SIGNING AND INITIALING ANYTHING).

                      Should have been alarming:  More than a $300K life insurance policy for a solo guy with only a mother in 50s?  Plus, expensive real estate purchases in a 6-year high defaulting/foreclosures-trend, mainly 6-year price depreciating trend market state, really [one should only buy when quarterly foreclosure lawsuits are very low PLUS the existing short sales and foreclosures/REOs inventory is almost non-existent]?  One would think his banks/credit unions would have heard of his big win and offered him a 4.5% APR for a few 15-year CDs or something, geez!

                      Blush

                      Having millions of dollars in my financial accounts means more, consistent fun for me.Lovies

                        dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
                        Oklahoma
                        United States
                        Member #82391
                        November 12, 2009
                        5482 Posts
                        Offline
                        Posted: September 27, 2013, 3:55 pm - IP Logged

                        The guy's a dunce, and he got taken. It was too bad he didn't get better advice from outside the first firm. He failed to do his homework. As to his supposed to be sharing... karma karma karma.

                         

                        For that kind of win: 1 large legal firm specializing in high value clients, 1 wealth management firm, 1 CPA firm specializing in high value clients, and 1 local legal firm to watch them all. Kinda like Lord of the Rings.  And don't necessarily go with the firms recommended by the others. Do your homework.

                        Thumbs Up

                        I Love Pink & Green 1908

                          duckman's avatar - ducklogodrake64x64
                          Jacksonville Florida
                          United States
                          Member #23018
                          October 6, 2005
                          752 Posts
                          Offline
                          Posted: September 27, 2013, 4:34 pm - IP Logged

                          If you must go to a financial advisor, only go to a flat fee-based advisor/company, not one that sells products/policies or where they make a commission off of the sale...

                            Teddi's avatar - Lottery-008.jpg

                            United States
                            Member #142504
                            May 13, 2013
                            620 Posts
                            Offline
                            Posted: September 27, 2013, 4:55 pm - IP Logged

                            I take back everything I have ever said about the lottery not being cursed.

                            There is obviously a curse. Seems only dumba$$es win. 

                            If you can take home $70 million AFTER taxes and end up tens of millions in debt 4 years later, you are a dumb_ _ _. There is no other way to put it. 

                            And these 'advisors' didn't even have to do any fancy accounting tricks or speak in legalese or use Wall Street terms that perhaps the regular Joe wouldn't understand. Didn't even have to forge his signature and pay off a notary. All they did was tell him to buy life insurance he didn't need and to buy properties he couldn't afford. And he did it.

                            Having an advisor does not preclude you from having common sense. No Pity!Here's the world's smallest violin. Another idiot winner flat broke.