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The Securities and Exchange Commission fined SeaWorld Entertainment Inc. on Tuesday for keeping silent about the negative impact of a documentary on its business.
The SEC has fined SeaWorld Entertainment $ 5 million
SEAS + 0.32%
and his former CEO for failing to reveal the negative trade impact caused by the July 2013 Blackfish documentary, which criticized SeaWorld's treatment of its killer whales.
In fact, the SEC said management was already worried about the company's potential for success before the release of the film.
The SEC stated that between December 2013 and August 2014, SeaWorld and former CEO James Atchison had made false statements or omissions in SEC files, press releases and other statements regarding the impact of Blackfish on the reputation and activities of the company.
Internally, a senior communications official said the company's reputation was "positively radioactive" in December, the SEC said. In an email, Atchison was concerned about the cancellations and [SeaWorld’s] program on killer whales. He linked the momentum of construction to [of] Blackfish "and added that he suspected" this trend will not diminish anytime soon, as the film will likely win an Oscar nomination when they are announced in mid-January. "
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But publicly, Atchison said he could not connect the film and the activities of the company. In January, he said in an article, "The suggestion that SeaWorld's reputation or activity was tainted by Blackfish is unfounded."
It was a recurring trend, in which Atchison would receive internal communications that Blackfish was hurting businesses, and the former CEO was publicly declaring that there was no impact. "And as we asked, we can not see any significant impact on our business," said Atchison during a conference call on March 13, 2014. "We have seen no impact on the business. business"
It was not until August 13, 2014, that SeaWorld acknowledged that the movie was hurting attendance.
This news, combined with a downward revision of earnings forecasts, pushed stocks down by 33%.
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Even if it does not admit or deny the allegations, SeaWorld pays a $ 4 million fine and Atchison pays more than $ 1 million in penalties and restitutions.
"The company is pleased to have solved this problem and to continue to focus on providing its customers with superior experiences, world-class animal care and saving animals in need. The company cooperated with the Commission throughout the process and the Commission approved the regulation on 18 September 2018, "SeaWorld said in a statement.
SeaWorld's former vice president of communications, Frederick D. Jacobs, has agreed to settle a charge of fraud and pay clearance and damages interest of approximately $ 100,000.
The SeaWorld stock has not yet reached its previous levels, but it has increased significantly.
Shares were stable Tuesday, but gained 130% in 2018, while the S & P 500
SPX, + 0.68%
gained 9%.
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