Family amusement park SeaWorld Entertainment Inc. and its former CEO James Atchison will pay more than US$5 million to settle fraud charges for misleading investors about the impact the documentary film Blackfish had on the company’s reputation and business.
The documentary criticised SeaWorld's treatement of killer whales (also known as orcas) and received media attention when it became more widely distributed in the later half of 2013. According to the press statement, the the US Securities and Exchange Commission's (SEC) complaint alleges that from about December 2013 to August 2014, Atchison made "untrue and misleading" statements or omissions in SEC filings, earnings releases and calls, and other statements to the press concerning Blackfish's impact on the company's reputation and business.
As a result, SeaWorld and Atchison have been charged with violating antifraud provisions of the federal securities laws, and SeaWorld has also been charged with reporting violations. According to the SEC, SeaWorld’s former vice president of communications, Frederick Jacobs, also agreed to settle a fraud charge 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. 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,” Steven Peikin, co-director of the SEC Enforcement Division, said.