SEC Subpoenas Man in Probe of Takeover Bid for Poker Firm
The Securities and Exchange Commission is seeking to force testimony from the man who it says ran the website of Doyle Brunson, a member of the Poker Hall of Fame now under investigation by the agency.
The SEC has twice subpoenaed Wallace Nakano over www.doylesroom.com, where Brunson announced his unsolicited $700-million offer to buy Los Angeles-based WPT Enterprises Inc., creator of the World Poker Tour television show. Nakano claims that the subpoenas weren’t properly served.
“We certainly believe that our service on Mr. Nakano is valid and we asked the court to compel Mr. Nakano to appear,” Katherine Addleman, an SEC district administrator in Fort Worth, said Thursday.
The commission is probing whether Brunson, 72, violated securities laws in July when he disclosed the offer, which was twice WPT’s market value at the time, and then refused to provide details to WPT. The bid expired after WPT refused to accept it.
Nakano’s lawyer, Leonard Sharenow in Los Angeles, said two subpoenas were sent to the Long Beach home of his client’s brother. Nakano doesn’t plan to testify, Sharenow said.
“It’s my understanding that he doesn’t have information relating to this offer,” Sharenow said. “I’ve communicated that to [the SEC]. I don’t understand why they’re so insistent on him testifying.”
The SEC said it was looking into whether Brunson illegally used deception in buying or selling securities, or made false statements in connection with the offer. Brunson couldn’t be reached for comment.
“When WPT publicly disclosed Brunson’s refusal to provide additional details about the offer, its stock price sharply declined, costing investors tens of millions of dollars in lost market value,” the SEC statement said.
WPT shares reached $29.50 on July 8, the day the offer was announced, a jump of 66% from the previous day’s close and their highest price since trading began in August 2004. They fell 12% the next day.
The shares fell 5 cents on Thursday to $7.09.
Brunson regularly plays on the World Poker Tour and has won $1.36 million in the show’s three seasons, the WPT website says.