Kawhi Leonard Trade on Hold as NBA Investigates Whether Clippers Circumvented Salary Cap

Kawhi Leonard #2 of the Los Angeles Clippers reacts to a play during the first quarter of the NBA game against the Dallas Mavericks at Intuit Dome in Inglewood, Calif., on April 7, 2026. Katelyn Mulcahy /Getty ImagesThe Los Angeles Clippers–Toronto Raptors trade that sends Kawhi Leonard back to Toronto was put on pause pending the NBA’s investigation into whether Los Angeles circumvented salary cap rules, both teams said on July 9, in statements to ESPN.“We have since been informed that the trade can only be finalized if the Raptors’ ownership group assumes the risk of penalties related to Kawhi’s contract that could theoretically result from the ongoing investigation,” the Clippers said. “The investigation is ongoing, and we expect the trade to be finalized following its conclusion.”The NBA began investigating the Clippers in September 2025 after a report alleged that the organization paid Leonard additional money in 2021 through a $28 million endorsement contract between Leonard and Aspiration Fund Adviser, a now-bankrupt California-based sustainability services company.About a month after Leonard signed a four-year, $176 million extension with the Clippers in August 2021, Clippers owner Steve Ballmer also made a $50 million investment in Aspiration and the company and Clippers announced a $300 million partnership.Aspiration Fund Adviser filed for bankruptcy last year before the investigation into the Clippers was launched. At the time, it listed the Clippers and KL2 Aspire LLC as creditors that it owed approximately $30 million and $7 million respectively. “KL” are Kawhi Leonard’s initials and his jersey number is 2.Shortly after the investigation began, Aspiration co-founder Joe Sanberg pleaded guilty to two counts of wire fraud and last month was sentenced to 14 years in prison for a five-year scheme of falsifying the company’s financials in many instances, defrauding lenders and investors of at least $248 million.The Clippers have strongly denied any wrongdoing on its end and said the team ended its relationship with Aspiration after two years because the contract was in default.On July 9, the team said it has fully cooperated with the investigation throughout the last 10 months, providing access to its staff, participating in dozens of interviews, and providing tens of thousands of documents.“At the heart of this investigation are Joe Sanberg and Aspiration. We did not funnel money to Kawhi Leonard through Aspiration. Like many sophisticated investors, financial institutions, and business partners, we were victims of a fraud initiated by Sanberg,” the Clippers said.Leonard was traded to Toronto in 2018 and led the organization to a championship in 2019—the only title in team history. During that summer, Leonard signed with the Clippers to return home to Los Angeles, where he grew up.After a seven-year run with Leonard, Los Angeles agreed to trade him back to Toronto on June 30.“The Raptors remain eager to bring Kawhi back to Toronto and look forward to a swift resolution for our players, our organization, and our fans,” the team said.The Associated Press contributed to this article.