https://www.facebook.com/donald.v.watkins/posts/10210346559802514
The SEC Strikes Back
By: Donald V. Watkins
©Copyrighted and Published (via Facebook) on September 2, 2016
©Copyrighted and Published (via Facebook) on September 2, 2016
Yesterday, the Atlanta office of the U.S. Securities and Exchange Commission "SEC" gave Alabama Governor Robert Bentley, First Mistress Rebekah Caldwell Mason, presidential candidate Hillary Clinton, and other subjects of my published investigative reports a helping hand in their battles to escape the heightened scrutiny of their conduct in government. The SEC filed a baseless lawsuit against three of my privately owned companies and me alleging that we defrauded "investors". The SEC distributed a press release across the nation to make sure everybody knew that the lawsuit had been filed.
The lawsuit and press release were designed to smear my name using the imprimatur of the SEC for legitimacy. This was a cheap PR stunt carried out by SEC insiders for the benefit of my adversaries in government and an opposing party in a 2013 federal lawsuit filed against me in New Jersey. This stunt will not work.
The SEC avoided any mention of the following material facts in its lawsuit and press release:
1. The SEC's lawsuit was filed only after I filed an October 22, 2015, lawsuit against the agency and one of its regional office executives in Atlanta federal court seeking a declaratory judgment, monetary damages and attorney's fees regarding the same legal issues. My case has been pending since October with not much action by the SEC and no publicity. Yesterday's lawsuit was an obvious act of retaliation by the SEC for the filing of my October lawsuit. The outcome of both lawsuits will depend upon the documentary evidence and not the SEC's spin in its press release or lawsuit.
2. Mr. Walter Jospin, the Regional Director of the SEC's Atlanta Office, issued a statement in the press release accusing me of duping investors. What Jospin omitted from his carefully crafted comments was the fact that he is a personal friend of the New York attorney who represents the plaintiff in the New Jersey case that raises the same baseless SEC allegations. In fact, Jospin and his lawyer buddy both worked as high-level executives for the SEC and are tied together in other significant ways. Jospin has failed to recuse himself from agency decisions in my case based upon of his conflict of interest. Now, Jospin is leading the SEC fight against me for the benefit of his former agency colleague.
3. Last year, my political adversaries referred the economic participation transactions that are the focus of both lawsuits (mine and the SEC's) to the Economic Crimes Unit of the U.S. Attorney for the District of New Jersey. The U.S. Attorney opened an active criminal investigation into my business and personal affairs. After we were contacted about the investigation and submitted a detailed explanation of my business affairs, corporate records, and personal conduct in November, the U.S. Attorney properly closed its investigation in January 2016 with no action taken against me.
4. The same political adversaries had launched earlier regulatory investigations of my bank by the Alabama State Banking Department, the Federal Deposit Insurance Corporation, and the Federal Reserve. These investigations were coordinated attacks on my character and business reputation. They were based upon a common set of flawed facts that are flatly contradicted by thousands of pages of corporate documents. My adversaries have been unsuccessful in their efforts to destroy my bank. Today, the bank is a profitable and sound business operation. It never sought or received federal bailout money and is one of 19 black-owned banks in the U.S.
5. The SEC launched its "non-public" inquiry into my companies in June 2014. It engaged in impermissible "twisting" conduct in witness interviews. The SEC took a sworn statement from me that month. It also subpoenaed personal and corporate documents dating back to January 2001. After my staff took the time to gather, organize and make thousands of pages of responsive documents available to the agency, the SEC informed my Atlanta attorney that it had no interest in reviewing these documents. No legitimate investigator subpoenas relevant corporate and personal documents and then refuses to review them. This is when we knew the SEC inquiry was a farce and was undertaken for personal and retaliatory reasons. As such, we sued the SEC in Atlanta federal court in October 2015. This case, which was not mentioned in the SEC's lawsuit or press release, is ongoing.
6. The SEC's complaint summarized a handful of business transactions that were cherry picked, deliberately slanted by the agency in the worst light possible, and taken completely out of context. Furthermore, the business records subpoenaed by the SEC, which the agency never reviewed, squarely refute the allegations of fraudulent conduct.
7. The SEC has never been interested in learning the truth about my businesses, their global reach, their value, or me. Instead, rogue officials within the SEC have hijacked the agency's investigatory powers and complaint process for malicious purposes. Since 2014, the agency's sole focus has been on destroying my businesses and me, and on hurting the financial interests of my stakeholders. The SEC has no interest in letting the true facts get in the way of this misguided focus.
8. We have consistently contested the SEC's jurisdiction to regulate my private business affairs and operations. I do not own or run publicly traded companies. I do not solicit investors in the open market. The individuals who are stakeholders in my businesses are very small in number and are friends of mine. The SEC conveniently ignored my businesses' "private company" exemptions from agency regulatory oversight so that it could get media headlines that impugned my character.
9. Finally, I can put my record in business and in life up against anybody's. I kept a global business functioning and growing during and after the Great Recession of 2008 without any government bailouts, without violating any domestic or international laws, without taking a salary since 2006, and without losing economic value for my stakeholders. Yet, the SEC has portrayed me as a person who defrauds investors. Ironically, the SEC's lawsuit against me is the biggest fraud of all.
The SEC's lawsuit was not written or filed to win in court. Its complaint is the legal equivalent of a scud missile. It is nothing more than a smear sheet gifted wrapped in legal jargon that was launched by friends of my adversaries to undermine my reputation and character. This smear tactic will not work because the documentary evidence is on my side.
Finally, I appreciate the tremendous outpouring of support that I have received in this matter. I have been fighting people like Walter Jospin and his cronies in the SEC all of my life. My closet is cleaner than theirs. I am standing on truth; they are standing on politics, spin and cronyism.
Donald V. Watkins
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