WASHINGTON, D.C. — SeaWorld Entertainment Inc., and its former CEO have agreed to pay more than $5 million to settle charges by the federal government that they mislead investors on the impact a negative documentary had on the company's reputation and business.
According to the U.S. Securities and Exchange Commission (SEC), SeaWorld and former CEO James Atchinson allegedly made false and misleading statements and omissions regarding the impact the documentary film ''Blackfish,'' which criticized the treatment of Seaworld's orcas (killer whales), had on the company. The SEC alleges it was not until August 2014, that the company acknowledged its declining attendance from negative publicity. The company's stock price then fell and caused significant losses to shareholders, the SEC said.
Also, according to the SEC, SeaWorld's former vice president of communications Frederick Jacobs agreed to pay $100,000 in disgorgement and prejudgment interest for his role in misleading SeaWorld's investors.
“This case underscores the need for a company to provide investors with timely and accurate information that has an adverse impact on its business," SEC Enforcement Division co-director Steven Peikin said in a statement. "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.”
According to the settlement, SeaWorld will pay a $4 million penalty and Atchison will pay more than $1 million in penalty and disgorgement, the SEC said.