Walt Garrison Is Not a Sophisticated Investor
That headline is a more or less a direct quote from a lawsuit filed in Denton County District Court this week, in which the former Dallas Cowboys fullback and Skoal pitchman accuses a friend and former teammate of being a bad investor and a lousy pal. According to the suit, back in August 2003, Walt and his wife Debbie (now his ex) opened up an account with Oppenheimer Funds, because, look, "it's the right way to invest." Even better, Garrison's former teammate, James "Mike" Montgomery, was an adviser in the Dallas office -- and last thing Walt wanted was a crooked book maker, so, touchdown.
According to the suit, the Garrisons told Montgomery they were "conservative investors" who'd been burned before; all they wanted was a safe bet. (As Debbie would later put it after the couple's divorce in February 2005, she wanted "to be cash rich, not stock rich.") And so, they say, Montgomery put them in auction rate securities, which are long-term securities whose value was set by banks at regularly scheduled auctions. The couple allege in their suit that Montgomery told them the bonds were "the equivalent of cash" -- which they more or less were before February 2008, because back then, holders could ditch out during the auctions.
But, of course, auction rate securities became worthless two years ago: Banks stopped buying the bonds, and investors were stuck with millions in investments that had suddenly gone worthless. That included the Garrisons, who say they lost $3.8 million. They join the long line of investors who lost everything and headed to the courthouse. Some companies settled, but the courts have dismissed a number of ARS-related suits -- not fraud, they've said. Which isn't stopping the Garrisons, who want their money back.