ORLANDO, Fla. – The U.S. Securities and Exchange Commission on Tuesday announced that SeaWorld and its former CEO have agreed to pay more than $5 million to settle fraud charges for misleading investors about the impact the documentary "Blackfish" had on the company.
"Blackfish," released in 2013, was highly critical of SeaWorld's treatment of its killer whales.
The SEC said SeaWorld and former CEO James Atchison made untrue and misleading statements or omissions in filings, earnings releases and calls to the media regarding Blackfish’s impact on the company’s reputation and business.
According to the SEC’s complaint, on Aug. 13, 2014, when SeaWorld first acknowledged that its declining attendance was partially caused by negative publicity from the film, SeaWorld’s stock price fell, causing significant losses to shareholders.
"This case underscores the need for a company to provide investors with timely and accurate information that has an adverse impact on its business," said Steven Peikin, co-director of the SEC Enforcement Division. "SeaWorld described its reputation as one of its ‘most important assets,’ but it failed to evaluate and disclose the adverse impact Blackfish had on its business in a timely manner."
The SEC’s complaint, filed in federal court in New York, charged SeaWorld and Atchison with violating anti-fraud provisions of the federal securities laws and charges SeaWorld with reporting violations.
SeaWorld and Atchison agreed to settle the SEC’s charges without admitting or denying the allegations, with SeaWorld paying a $4 million penalty and Atchison paying over $1 million in penalty and disgorgement.
Meanwhile, SeaWorld’s former vice president of communications, Frederick D. Jacobs, agreed to settle a fraud charge and to pay disgorgement and prejudgment interest of approximately $100,000.
SeaWorld Parks & Entertainment issued a statement later Tuesday.
"The company and its former chief executive officer, Jim Atchison, have both reached settlements with the Securities and Exchange Commission arising out of statements made by the company in 2013-2014 without admitting or denying the allegations. The company is pleased to have resolved this matter and to continue to focus on delivering superior guest experiences, world-class animal care and rescuing animals in need. The company cooperated with the commission throughout the process and the commission approved the settlement on September 18, 2018."
All of the settlements are subject to court approval.
FIRST ON #NEWS6 - U.S. Securities and Exchange commission sues #SeaWorld and its former CEO James Atchison over “omissions and “disclosures” related to the impact of the documentary #Blackfish pic.twitter.com/G1x2qLU2PU— Mike DeForest (@DeForestNews6) September 18, 2018
The SEC is seeking unspecified civil penalties against #SeaWorld and Atchison as well as “disgorgement of all ill-gotten gains from the unlawful activity” alleged in the lawsuit.— Mike DeForest (@DeForestNews6) September 18, 2018
UPDATE: In a press release, the SEC announced that SeaWorld and Atchison agreed to pay more than $5 million to settle the civil fraud charges.— Mike DeForest (@DeForestNews6) September 18, 2018
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