Fred Jacobs, former VP-communications at SeaWorld, has agreed to settle a fraud charge for his role in misleading investors and to pay $100K disgorgement charges and prejudgment interest, according to the Securities and Exchange Commission.
The SEC announced Jacobs' settlement as part of the $5M fraud settlement with SeaWorld Entertainment and ex-CEO James Atchinson for their roles in misleading investors about the impact of the 2013 film "Blackfish," which criticized the company’s treatment of its killer whales.
The SEC complaint alleged that SeaWorld and Atchinson from December 2013 through August 2014 “made untrue and misleading statements or omissions in SEC filings, earnings releases and calls, and other statements to the press regarding Blackfish’s impact on the company’s reputation and business.”
According to the complaint, on Aug. 13, 2014, “when SeaWorld for the first time acknowledged that its declining attendance was partially due to negative publicity, SeaWorld’s stock price fell, causing significant losses to shareholders.”
Steven Peikin, co-director of the SEC enforcement division, said the case underscores the need for companies 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," he said in a statement.
Without admitting or denying the allegations, SeaWorld agreed to pay a $4M penalty and Atchison will pay a $1M penalty.
Jacobs retired in December 2015, after a 25-year career at SeaWorld.