Nicolas Cage sued his former business manager for $20 million on Friday.
Cage claims bad advice and mismanagement by Samuel J. Levin led him toward financial ruin, the AP reported.
"Instead of protecting and preserving Cage's wealth during one of the greatest economic periods in the country's history, Levin placed Cage in numerous highly speculative and risky real estate investments, resulting in Cage suffering catastrophic losses," the lawsuit states, according to The Celebrity Cafe.
According to the AP, Levin served as Cage's business manager from 2001 to 2008 and collected millions of dollars in management fees, court documents state.
Cage relied on Levin's statements and advice and couldn't have known about the financial trouble he was facing until after he hired new management, according to the lawsuit.
Public records show Levin has been a licensed certified public accountant in California for nearly 25 years and has no public record of disciplinary actions, the AP reported.
Yes, Levin may be to blame for his poor judgement in investments and other bas advice offered to Cage, but it is also Cage's duty to follow where his money is going. While Levin acts as his advisor, Cage should not commit all his funds and assets into one man without following what investments are being made.
The financial adviser community is replete with incompetents, frauds, and outright thiefs. There are certainly a number of financial advisers who are dedicated and of value to their clients; however, there appear to be minimal standards or qualifications for the title and little in the way of oversight from or over the profession. There are a few warning signs that might indicate one should immediately rescue one's finances from a risky adviser. These include:
1. The adviser appears to share many or most of your personal beliefs and interests. Frauds of all kinds seek to identify with their patsies and use this as leverage to gain their trust. If you are religious and your adviser mentions Jesus and praying often, run for the hills.
2. Returns are higher than others get. The single best way to defraud people is to play to their greed. Bernie Madoff made billions that way. If you see your investment grow by ten or more percent for two years in a row, get very nervous as you may soon see it drop by one hundred percent.
3. The adviser says "Trust me". Honest persons earn your trust by their actions not by telling you they are honest.
4. The adviser claims to be a rogue or otherwise buck the mainstream. One of the first things that charlatans seek to bring to the table is the feeling that the mainstream is out to get them and prevent them from taking over the world. This is true in medicine ("my cure would save humanity if it weren't being suppressed by the AMA", in locomotion ("my carburetor invention enables autos to run on water but Detroit has deep sixed it because they are in bed with big oil", or finance ("get in on the ground floor before the Wall Street big boys scuttle this new investment program that can enable the little guys to become wealthy".
If you have money to invest, you need to think of that money as representing the finest achievement that you can provide to the world (your creativeness and hard work) and you therefore have an obligation to your money to ensure that it is carefully husbanded. You wouldn't build a playhouse for your children from materials scavenged out of the garbage of your neighbors, why would you invest your money through garbage schemes that you have not spent at least a little time of research?