Los Angeles Clippers owner Steve Ballmer lawsuit explained: Why are 11 Aspiration investors suing him?

Los Angeles Clippers owner Steve Ballmer has been named in a lawsuit alleging that he utilized a third-party company to secretly funnel money to star player Kawhi Leonard.

In September Leonard was named in a scandal involving a deal signed in 2021 with a company named Aspiration, now called Catona. The deal reportedly included a $28 million ‘no-show’ endorsement deal with Aspiration that required no action from Leonard.

It was alleged that the deal was actually designed to siphon more money to Leonard in a bid to keep him with the Clippers, although he was already signed to a max deal worth $176.3 million. In a new lawsuit, 11 investors in Catona are claiming that they were misled about the company’s activities and were unaware of the potentially illegal funneling of funds to Leonard.

Aspiration co-founder Joe Sanberg was the first name cited in the lawsuit but on Monday Clippers owner Ballmer was revealed as another name in the filing. Sports Illustrated reports that the lawsuit details the charges:

“The arrangement was that Ballmer would be an investor in Catona and in return, Ballmer would use Catona to secretly funnel millions of dollars to star NBA player Kawhi Leonard. These funds would be channeled through Catona to Leonard so that Ballmer could induce Leonard to re-sign with the Clippers by covertly paying him more than allowed by the NBA’s salary cap rules."

“It also served Ballmer’s interest in getting extra money to Leonard so he could circumvent the salary cap, beat out the competition and re-sign his team’s superstar player. Ballmer was complicit in and aided and abetted Sanberg’s fraud for his own self-serving purpose. Ballmer publicly endorsed Catona and infused over $50 million into the company. Absent Ballmer’s support, Catona could not have sustained the frauds set forth herein.”

Sanberg has been charged with defrauding investors out of $248 million. He has pleaded guilty to two counts of wire fraud and is now facing two sentences of up to 20 years.

Ballmer is now under investigation by the NBA to decide whether he did indeed use Aspiration to circumvent the league’s salary cap rules. But now that he is caught up in Sanberg’s legal situation there is also the prospect of far greater consequences for the 69-year-old.

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