Nicolas Cage Sued by Former Money Manager
Actor had sued advisor for fraud; manager claims Cage's spending to blame.
Nov. 24, 2009— -- It's a familiar Hollywood script with a twist.
Nicolas Cage is being sued by his former business manager, Samuel J. Levin, who claims lavish spending, not his advice, is to blame for the actor's financial meltdown.
In the suit, filed in Beverly Hills, Calif., Nov. 12, Levin is seeking a declaration that he acted properly and that he didn't excessively charge Cage for his services. He also claims he is owed $129,000 for work he did after he was let go in 2008.
The action was a countersuit to the suit Cage filed against him a month earlier, alleging fraud and seeking $20 million.
Cage's attorney, Marty Singer, said it was ultimately up to Levin to properly manage Cage's finances.
"You're a business manager," Singer told The Associated Press recently. "You need to say no."
Unsophisticated in finance and unwilling or unable to monitor their investments properly, many of the biggest stars in entertainment have turned their financial affairs over to advisors or wealth managers. Most have seen their investments grow along with their wealth. Others, though, are left demoralized, dismayed and angry after watching their fortunes tumble into financial ruin.
But financial experts say the Cage case poses an important legal question: Who is ultimately at fault when a stubborn Hollywood star with a taste for excess ignores the advice of a hired financial professional?
"A money manager or financial advisor can have wonderful financial advice for a client," said Michael Eisenberg, a Los Angeles financial advisor whose roster of clients includes many in the entertainment industry. "But ultimately it is the responsibility of the client to make spending decisions and essentially keep an eye on his finances."
Disgruntled clients suing their money manager after a financial collapse isn't new, of course. But the Cage case underscores just how a client with lots of money to burn can still find himself in debt. Cage's films credits include "Leaving Las Vegas," "Con Air" and other top-grossing movies.
Veteran financial advisors and money managers contacted by ABC News were reluctant to weigh in on the Cage case specifically, but most said financial problems like these often occur when a client is neglecting his financial affairs.
"Even if you have a financial professional overseeing your investments, it's important to keep an eye on your cash flow and take responsibility for your own finances," said Bradley Ducoat, a Boca Raton, Fla., financial planner. "That's particularly true for wealthy individuals with a broad set of investments."
Cage's alleged spending habits are legendary even by Hollywood's outsized standards. The actor in 2007 alone bought $33 million in property, 22 automobiles and nearly 50 pieces of expensive jewelry, art and other exotic items, according to Levin's lawsuit.
