First, a recap: On Sunday night, CBS reported the apparent suicide of David Salinas, a Houston-area financial manager who "doubled as the founder of a prominent Houston-area summer basketball program," Houston Select. The suicide apparently came on the heels of a Securities and Exchange Commission investigation into Salinas' investment practices for his investment fund, J. David Financial Group, practices which may have cost a score of college basketball coaches millions of dollars.
The fallout could be devastating for the coaches involved, which include former Arizona coach Lute Olson, Baylor coach Scott Drew, Texas Tech coach Billy Gillispie and Gonzaga assistant Ray Giacoletti, among others. If the investigation unearths a connection between investments and access to talent -- several of Salinas's players ended up playing for the coaches on the list of investors -- then repercussions from the NCAA could be soon to follow.
At best, a score of coaches invested their money in what appears to be a ponzi scheme. At worst, they did so in exchange for the ability to recruit players from Salinas' program. The first implication is embarrassing; the second could be downright explosive.
At the very least, it's a story that is bound to metastasize continually in the coming weeks and months. In fact, that process has already begun. On Monday, in the wake of the original report, former Houston coach Tom Penders told The Daily's Dan Wolken that Salinas approached him and made "a strong, strong implication" that investing would increase Penders's access to recruits:
“He talked about all these coaches that he had investing with him,” the former University of Houston coach told The Daily last night. “I told him because he was an AAU guy, I couldn’t possibly get involved in that. I said, ‘I think that’s kind of a rules violation, or could be.’ ” Penders, now retired, told The Daily that Salinas solicited him for a $100,000 investment in their first meeting and “made a strong, strong implication” that it would help Houston gain access to prospects that were part of the Houston Select, an AAU program that Salinas founded.
Amusingly, Penders also said he had no idea why college coaches -- who are "supposed to be street smart," to use his phrasing -- decided to invest money with an AAU program founder in the first place. Valid question, Tom. One can safely assume the NCAA Committee on Infractions will be wondering the exact same thing.
In the meantime, the coaches implicated in the budding scandal have all either confirmed their involvement or refrained from commenting. Only one, former Duquesne and Nebraska coach Danny Nee, openly issued a denial. Speaking with the Omaha World-Herald, Nee said:
“Whatever they said I did, I didn’t do,” Nee said. He called Salinas “a good friend.” “It’s a sad loss,” Nee said.
Today, CBS's Gary Parrish followed up with this:
Why did we report that?
Because a source provided us with a brochure from Select Asset Management, LLC -- another Houston-area investment firm that's run by Houston Select co-founder Brian Bjork and is associated with J. David Financial Group. The brochure features a "testimonial" from Nee, now the head coach at the United States Merchant Marine Academy. The testimonial reads: "I have been a client with J. David Financial Group since I was referred to them in 1995-96. After several financial planning sessions, I became very comfortable with their long-term visions and investment style. More importantly, I marvel at their track record in both up and down markets."
In other words, we stand by our report.
Note to the other coaches implicated in this mess: If your name and testimonial is on a J. David Financial Group brochure, it's probably best to come clean. Failing that, issue a quiet "no comment" and go on your way. This thing is going to get much worse before it gets any better.