Eric Watson pleads advancing years in standoff with SEC
Where is Eric Watson? It’s a question that United States securities regulators will now be asking in advertisements in the New York Times after their efforts to find and serve the controversial New Zealand businessman with formal complaint of insider trading proved unsuccessful.
In July last year the Securities and Exchange Commission filed a civil complaint that Watson – and two business associates – misused inside information to profit from the crypto bandwagon rebranding of ostensible beverage maker Long Island Ice Tea Corp into Long Blockchain in late 2017.
Watson this week strongly denied any wrongdoing, noting that even if the complaint was taken at face value he is not said to have personally benefited from any of the share transactions in question. “This is somehow being lost in the noise that is this case,” he said.
Watson also denied hiding from document servers: “They have my contact details, obviously, but to date have received nothing at any point. If they had or did make contact with me service could appropriately have been arranged.”
But court filings show the SEC has tried numerous avenues to contact and serve Watson, with the businessman being difficult to pin down and his agents flatly refusing to accept receipt of the complaint on his behalf.
Repeated attempts to serve Watson via Spanish authorities, who visited his apparent residence in Ibiza, failed as they were unable to locate him. And efforts to serve via lawyers acting for the embattled businessman in unrelated civil fraud proceedings in the United Kingdom, and a former London police officer writing to the SEC on behalf of Watson seeking more information about the insider trading case, were rebuffed.
The SEC mulled, and ultimately decided against, engaging a private investigator in Spain to track down Watson, and instead opted to apply to the court to have service effected by advertisements in the New York Times.
“They may not locate him, and their search is certain to add to the delay in proceeding,” the regulator told the court of the private investigator option.
Lawyers for the SEC had submitted Watson was well-aware of the proceedings, pointing to several Herald reports canvassing the complaint where he had provided commentary.
Correspondence filed to the court between the SEC and Mark Winters, the former policeman employed by Watson to engage with the regulators, gives an insight into the standoff.
Winters, who told the Herald this week the complaint as filed by the SEC had “no apparent evidence of anything other than Eric assisting in conjunction with the company’s adviser to assist the company with its new venture,” told regulators last July he acted for Watson.
“Mr Watson resides in Europe (in a small island community), and given his advancing age would prefer to assist the SEC via facilitated calls and correspondence via my firm,” Winters wrote.
Winters said his client was innocent of the allegations – “He is keen to clear his name, as the allegations are damaging to his and his family’s reputation” – and rejected reference by regulators to Watson’s prior tangling with them in the late 90s over his trading in McCollam Printing shares.
“Eric noted his ‘history’ with the SEC as mentioned by your team on our call which resulted in a ‘no fault’ settlement, and believes this has no bearing on the current case at hand,” Winters wrote.
Winters concluded his email with a blunt refusal to accept service on his clients’ behalf: “Lastly, I confirm that I am not authorised to accept service of your complaint for various legal reasons.”
Watson, 63, who looked fit and healthy when the Herald interviewed him last year, joked this week about the reference to his “advancing years” and again stressed his rejection of the complaint.
“Clearly the SEC see this as a serious matter to finalise, as do I. I have via Mark offered to co-operate, ideally with suitable disclosure provided, rather than a trial via media with very little substantive evidence for formal rebuttal,” he said.
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