Washington D.C., Sept. 1, 2016 —The Securities and Exchange Commission today charged Alabama attorney Donald Watkins and companies he controls with defrauding professional athletes and other investors out of millions of dollars, much of which he spent on his girlfriend and to cover personal expenses like alimony, past due taxes and credit card bills.
The Commission’s complaint, filed in federal district court in Atlanta, alleges that Watkins and his companies, Watkins Pencor LLC and Masada Resource Group LLC falsely told investors that their funds would be used to support waste-to-energy ventures.
The complaint further alleges that the defendants falsely claimed that Waste Management Inc., a large, international waste treatment company, was seriously considering acquiring Watkins Pencor, Masada, and its affiliated companies in a multi-billion-dollar transaction. According to the complaint, Waste Management’s “interest” in Masada never advanced past a brief initial meeting in August 2012, more than a year after the defendants began telling investors that negotiations were progressing and that the acquisition was imminent.
“We allege that Watkins duped investors into believing that there was a lucrative transaction on the horizon, when in fact there was none,” said Walter Jospin, Regional Director of the SEC’s Atlanta Regional Office.
The SEC charges the defendants with violating the antifraud provisions of the federal securities laws and a related SEC antifraud rule. The SEC’s complaint seeks permanent injunctions, penalties and return of allegedly ill-gotten gains with prejudgment interest. The SEC’s complaint alleges that Watkins’ law firm, Donald V. Watkins, P.C., received investor monies and charged the firm as a relief defendant for purposes of recovering the allegedly ill-gotten gains it received.
The Investigation was conducted by the Atlanta Regional Office, under the supervision of William Hicks and Walter Jospin, and the litigation will be led by Paul Kim and supervised by Graham Loomis.