Colleges are now looking to close some legal loops that allow financial advisers to contact athletes who are promising pro prospects and lead them into making bad decisions regarding their money.

The Wall Street Journal‘s Julie Steinberg has this report:

…It is illegal in most states for sports agents to provide gifts or other items of value to amateur athletes—and agents are supposed to register with state regulators before approaching an athlete. Violators can be prosecuted.

hose laws rarely apply to financial advisers like Ms. Wong. While NCAA rules prohibit athletes from accepting money or gifts from anyone trying to woo them, there is little to discourage financial advisers from trying.

As a result, brokers, insurance agents, bankers and other types of financial advisers often contact athletes who are promising pro prospects, according to college athletic officials.

At Baylor University, some football and basketball players have gotten messages through their Facebook pages from financial advisers, says Josh Lens, assistant athletic director of compliance at the Waco, Texas, college. Last season, he confronted one adviser trying to talk to players outside the locker room after a victory against Texas Christian University in Fort Worth.

Cincinnati Bengals defensive tackle Devon Still says five financial advisers he met while playing at Pennsylvania State University from 2008 to 2011 promised “more than anyone else was offering” if he would hire them.

He hired a different broker during his senior year and invested $100,000 through that broker after joining the National Football League.

Last year, the broker was banned for life from the securities industry after failing to appear at a disciplinary proceeding related to fraud allegations at a firm that was recommended by the broker to clients. Mr. Still says he hasn’t been able to get his money back.

A lawyer for the broker, Jinesh Brahmbhatt, says his client hasn’t recovered an investment he made in the same firm.