The U.S. Securities and Exchange Commission (SEC) has twice issued subpoenas to Wallace Nakano, manager of Internet poker room DoylesRoom.com, to testify against Doyle Brunson, the room's owner, in an ongoing investigation being run by the SEC into the $700 million bid Brunson and unnamed backers publicly offered World Poker Tour Enterprises (WPTE) in July, 2005. Brunson reportedly posted news of the bid at DoylesRoom.com.
Nakano is claiming the subpoenas were not properly served. According to his Los Angeles-based lawyer, Leonard Sharenow, the subpoenas were delivered to the Long Beach, California, home of Nakano's brother, and Nakano apparently has no intention of testifying.
"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."
Katherine Addelman, an SEC district administrator in Fort Worth, Texas, said. "We certainly believe that our service on Mr. Nakano is valid and we asked the court to compel Mr. Nakano to appear."
The SEC is probing whether Brunson violated anti-fraud laws this summer when he disclosed his bid, which offered a 100% premium over WPTE's market value at the time, and caused the firm's shares to skyrocket 55.4%.
According to a statement issued by the SEC in late December: "When WPT publicly disclosed Brunson's refusal to provide additional details about the offer to WPTE, its stock price sharply declined, costing investors tens of millions of dollars in lost market value." The bid subsequently expired.
Please see PokerListings.com's previous article regarding this issue at US Regulators Investigate Brunson's WPT Bid.