Court Grants Partial Summary Judgment in Fraudulent Offering Case Against Alabama Attorney
Litigation Release No. 24196 / July 12, 2018
Securities and Exchange Commission v. Donald V. Watkins, Sr., et al., No. 1:16-cv-3298-SCJ (N.D.Ga.) (filed September 1, 2016)
On June 28, 2018, Judge Stephen C. Jones of the United States District Court for the Northern District of Georgia granted the SEC's motion for partial summary judgment against attorney Donald V. Watkins, Sr. The Court also granted in part and denied in part the SEC's motion for partial summary judgment as to the businesses controlled by Watkins. The SEC's complaint alleges that Watkins and his companies defrauded professional athletes and other investors out of millions of dollars by telling them that their investments would be used to support waste-to-energy ventures. The complaint alleges that, in reality, Watkins spent much of the money he raised to cover personal expenses like alimony, past due taxes and credit card bills, and to make payments to prior investors.
The Court ruled that the SEC was entitled to summary judgment on its fraud claims based on several investments made by a former NBA player in promissory notes totaling $2,150,000. The Court found that, when selling the notes, Watkins (1) misrepresented that he and his companies would use the investor's money for specific projects of their waste-to-energy business; and (2) intended to deceive the investor, in that Watkins, upon receiving the funds, promptly used them to repay another investor and to pay various personal expenses, such as alimony and back taxes.
In addition to the claims with respect to the former NBA player, the SEC's complaint alleges that Watkins and his companies defrauded other investors. The SEC did not move for summary judgment as to those claims, and they have yet to be decided. The Court will determine the remedies for the violations for which it granted summary judgement at a later time.
The SEC is represented by Joshua Mayes, Paul Kim and M. Graham Loomis of the Atlanta Regional Office in this litigation.
See also Litigation Release 23634.