SEC probing Watson’s Northstar for possible securities violations

SEC main Watson

Brian Watson is CEO and owner of Denver-based Northstar Commercial Partners. (BusinessDen file)

The Securities and Exchange Commission is investigating Denver-based real estate firm Northstar Commercial Partners.

Danny Mulcahy, who worked for the firm as director of equity for about two years until April 2019, said in a March 30 deposition related to an ongoing lawsuit against Northstar filed by Amazon that he had been deposed by the SEC.

Mulcahy said the investigation revolves around possible securities violations.

Paul Vorndran, an attorney with Jones & Keller who is representing Northstar, confirmed the investigation.

“This investigation has been going on for over two years now, and we have fully complied with all requests for information,” Vorndran said in an email to BusinessDen. “We deny any violations by Northstar, and we will vigorously defend any allegation to the contrary.”

A spokesman for the SEC declined to comment.

Northstar is owned by founder and CEO Brian Watson, formerly the Republican nominee for Colorado state treasurer in 2018.

Since April 2020, Watson has been fighting a lawsuit filed against him by Seattle-based Amazon, which alleges he paid kickbacks to Amazon employees in order to win data center development deals for the company in northern Virginia. The FBI has also investigated the matter. Watson has denied wrongdoing.

Mulcahy said in the lawsuit deposition that he did not approach the SEC with concerns. Mulcahy said the deposition with the SEC lasted eight hours, and that he generally answered questions regarding various investments that Northstar had and “the preparation of such.”

That was the extent of Mulcahy’s specificity. His Virginia-based attorney, Kevin Bedell, said during the deposition that his client “had to sign a whole bunch of confidentiality stuff.”

In a separate portion of the seven-hour lawsuit deposition, Mulcahy said he had concerns at the time of his April 2019 resignation that Northstar was engaged in improper conduct.

“Unequal treatment of investors, poor management of investments, side deals that I hadn’t been aware of,” he said. “That’s sort of it in a nutshell.”

He said that some investors “got paid differently than other investors.” And he said that Watson awarded a firm a leasing contract in return for the broker agreeing to pay Watson 20 percent of the broker’s commission, without disclosing that to investors.

Mulcahy said he believed the unequal treatment and side deals were illegal. He classified the kickbacks that Watson allegedly paid to two Amazon employees as a “side deal.”

SEC main Watson

Brian Watson is CEO and owner of Denver-based Northstar Commercial Partners. (BusinessDen file)

The Denver-based real estate firm has also been dealing with an FBI investigation and a long-running lawsuit filed by Amazon.

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