Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
By Richard Hill
Sept. 2 — Alabama attorney Donald Watkins and his companies defrauded investors, including professional athletes, out of at least $6 million by promoting a failing waste-to-energy venture, the SEC said ( SEC v. Watkins, N.D. Ga., 1:16-cv-03298, 9/1/16 ).
Watkins, who sued the Securities and Exchange Commission in October to halt its investigation, allegedly told investors that international waste treatment company Waste Management Inc. was considering acquiring the two companies—Watkins Pencor LLC and Masada Resource Group LLC.
The defendant allegedly told investors, including former and current professional basketball and football players, that a multi-billion dollar deal was imminent. Talks with Waste Management never got past a brief initial meeting more than four years ago, however, the SEC said in a Sept. 1 complaint in the U.S. District Court for the Northern District of Georgia.
Watkins, who doesn't currently practice law, touted the negotiations in order to sell promissory notes and “economic interests” in his companies, the SEC said. Allegedly, he used investor funds for personal expenses, including $100,000-a-year alimony payments, past taxes, business debts and credit card bills.
The agency is seeking fines, restitution and a permanent injunction against the defendants. Watkins' firm, Donald V. Watkins P.C., allegedly received investor funds and was named a relief defendant.
Watkins' counsel Mario Williams, Williams Oinonen LLC, Atlanta, told Bloomberg BNA the SEC's complaint was “unsubstantiated and baseless” and was filed in retaliation for Watkins' October suit and for critical remarks Watkins has made about high ranking officials in Alabama. In his suit, Watkins called Masada an ongoing enterprise “that is fully implementing its business plan.”
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The complaint can be seen at http://www.bloomberglaw.com/public/document/Securities_and_Exchange_Commission_v_Watkins_et_al_Docket_No_116c.
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