Ex-advisor Charles A. Banks IV settles with SEC
According to reports, Tim Duncan’s former financial advisor has reached a partial settlement with the SEC, which sued Charles A. Banks IV over allegations of securities fraud in his handling of the retired Spurs star’s investments.
In a lawsuit filed in 2015, Duncan, a five-time NBA champion, alleged that Banks directed him toward multiple investments in hotels, wineries and beauty products despite not revealing Banks’ own financial conflicts of interests in the businesses. Court records and documents show that Banks had financial interests in the investments.
Duncan earned over $240 million in salary in his 19-year NBA career.
According to court records Charles A. Banks IV, 49, of Atlanta, has agreed to a settlement that bars him from defrauding anyone else while acting as a securities adviser. The so-called “consent decree” also blocks him from being a director or operator of any entity registered with the SEC. The decree also places Banks on notice that he is subject to “disgorgement” — the SEC’s way of taking away the profits obtained by illegal acts and returning them to investors.
SEC allegations and separate criminal charges
Banks was accused of defrauding Duncan on a $7.5 million loan to Gameday, a company that Banks maintained control over. Gameday also received a bank loan with what Duncan says he believed was his signature on a document that would get him $1.5 million in cash back and lower his guarantee exposure. Banks is alleged to have used that signature to increase Duncan’s guarantee exposure to $13.5 million at Comerica Bank instead of $6 million.
The SEC sued Banks in Atlanta federal court in September, and the decree comes a month after Banks pleaded guilty in a separate criminal case in San Antonio.
Both the criminal case and the SEC lawsuit focused on a 2012 investment Duncan made in Gameday Entertainment LLC, a startup for which Banks served as chairman. But the lawsuit also makes more securities fraud accusations against Banks over Duncan’s investments in a cosmetics company and wineries. Those claims remain pending.
In April, in the criminal case here, Banks admitted to much of the allegations related to the Gameday deal. But Banks argues that Duncan lost no money in his investment in Gameday because he got monthly payments at 12 percent annual interest for more than two years. Duncan sued Banks and the company in 2015, and that lawsuit currently is on hold in Colorado.
Gameday was dissolved in January. According to Duncan and federal prosecutors, Duncan lost his initial $7.5 million investment because Gameday sank, and he’s still liable for the $6 million guarantee to Comerica Bank.
Banks could face up to 20 years in prison when U.S. District Judge Fred Biery sentences him on June 27.
The foregoing information is being provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
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