U.S. securities regulators said Friday they are formally investigating U.S. poker champion Doyle Brunson's unsolicited $700 million offer in July to buy gaming entertainment group WPT Enterprises Inc.
News of the unsolicited bid, which was nearly double the company's market value, sent WPT's stock price soaring more than 50 percent in one day to an intraday high of $29.50.
The price then rapidly fell after the company said it was not able to reach Brunson or his attorneys for further information on the bid, according to the Securities and Exchange Commission. The offer later expired.
WPT, which owns the popular World Poker Tour television show, was unchanged at $6.23 per share on the Nasdaq Friday.
The SEC also said Friday that it filed an action in Fort Worth, Texas, federal district court to enforce subpoenas issued to attorneys David Chesnoff and Chaka Henry, whose Las Vegas firm Goodman & Chesnoff PC represented Brunson in his unsolicited offer.
Soon after delivering Brunson's offer, the firm withdrew from the matter. Chesnoff said he did not have a comment, and a call to Henry was not immediately returned.
Brunson's attorney, Alan Isaacman, said: "We're confident that after the investigation it will be seen that the offer was a sincere offer and that there were no laws violated."
"We have no comment except that we plan to cooperate with any ongoing investigation," said Todd Steele, chief financial officer of WPT Enterprises.
The SEC said it is investigating whether Brunson's offer and its publication violated anti-fraud laws.
Brunson, who is one of the best-known professional poker players in the United States, has invoked his Fifth Amendment right against self-incrimination and declined to testify in the investigation, the SEC said.
The agency said Brunson directed the two attorneys to withhold certain documents and not to testify on critical aspects of the offer, under the attorney-client privilege and work product doctrine, which generally protects materials prepared by a lawyer in anticipation of litigation.
The SEC's subpoena enforcement action seeks to compel Chesnoff and Henry to testify and provide the requested documents.