Readers may recall the flurry of interest on World Poker Tour Enterprises back in July (see earlier reports) in which a possible takeover by poker legend Doyle Brunson, backed by unknown financial interests became a public talking point at the Vegas championships then taking place.
The stock hit a record high of $29.50 amidst all the excitement and media speculation but rapidly fell back (this week’s price is around $6.20) when the deal appeared to fall through. At the time the Securities and Exchange Commission expressed some reservations about the manner in which negotiations and statements had been done and hinted at a possible public investigation.
Such an investigation now appears imminent, reports Reuters. The SEC has filed an action for the enforcement of subpoenas issued earlier. Brunson’s legal representatives had previously declined to offer up key internal documents requested in the subpoenas on the grounds of attorney-client privilege.
The scene now appears to be set for a court hearing, although venue and date have not yet been announced. The subpoenas could compel individuals involved in the deal to testify and furnish previously undisclosed documents relating to the offer.
Las Vegas law firm David Chesnoff and Chaka Henry were apparently the go-betweens in the deal, making an offer which was then taken off the table after a short period and without explanation. The company has not commented on the recent SEC activity., whose Las Vegas law firm removed the offer almost as quickly as they had made it, has declined comment on the case at the moment. Brunson himself has so far invoked his Fifth Amendment right against self-incrimination and has declined to participate in the investigation.
According to the Reuters report, the SEC is investigating the legitimacy of Brunson’s offer and whether its issuing of the offer violated securities, and anti-fraud laws. The subpoenas are set to further the investigations, as apparently the Brunson team chose to withhold certain documents and not to testify on critical pieces of the short-lived offer.
A World Poker Tour spokesperson has issued a brief statment on behalf of WPTE, claiming that the “The World Poker Tour is cooperating completely with this ongoing investigation.”