Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Sept. 12 — The former investment adviser to a retired San Antonio Spurs basketball player is facing criminal and civil allegations that he fraudulently induced him to invest millions in sportswear company Gameday Entertainment LLC ( United States v. Banks, IV, W.D. Tex., No. 5:16-cr-00618, indictment filed 9/8/16 ; SEC v. Banks, IV, N.D. Ga., No. 1:16-cv-03399, complaint filed9/9/16 ).
Charles A. Banks, chairman of Gameday, was criminally charged by the U.S. with two counts of wire fraud. If convicted, Banks faces a maximum penalty of 20 years in prison for each count.
Neither the indictment nor the related Securities and Exchange Commission's complaint identify the Spurs player by name. The indictment refers to him as “T.D.” A Bloomberg BNA review of the Spurs roster for the last 10 years shows only one player with those initials, Tim Duncan, who retired in July 2016. Neither the SEC nor the Justice Department would confirm his identity.
The civil suit was filed in the U.S. District Court for the Northern District of Georgia where Banks resides. The indictment was filed in the U.S. District Court for the Western District of Texas.
Gameday was formed in 2010, but needed additional capital to operate and expand. Banks allegedly told “T.D.” that the company intended to offer two investors the chance to participate in a $15 million mezzanine debt and equity offering of the company. The funds were allegedly intended to support Gameday's business operations and pay off its existing bank debt.
In 2012, T.D. loaned Gameday $7.5 million and was to receive monthly interest payments and a security interest in all of the company's assets, the indictment and SEC complaint said.
According to the SEC, Banks knew that his representations were false and that there were no other investors involved. Additionally, Banks never told Duncan that he would receive a $225,000 fee for securing an investor, the agency said.
Banks also allegedly deceived T.D. into signing a guarantee agreement that substantially increased his risk in the investment. The move allowed Banks to divert another $180,000 in a “guarantee fee,” the SEC said.
The commission is seeking permanent injunctive relief, disgorgement plus prejudgment interest, civil monetary penalties and an officer/director bar.
Banks is represented by John E. Murphy of San Antonio, Tex. in the criminal matter, who couldn't be immediately reached for comment. Defense counsel for the civil proceeding is unknown.
To contact the reporter on this story: Antoinette Gartrell in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
To view the complaint, visit: http://www.bloomberglaw.com/public/document/United_States_Securities_and_Exchange_Commission_v_Banks_Docket_N.
To view the criminal indictment, visit: http://www.bloomberglaw.com/public/document/USA_v_Banks_Docket_No_516cr00618_WD_Tex_Sept_08_2016_Court_Docket
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)