Securities and Exchange Commission slap draftKings with a penalty on Wednesday after regulators accused the company’s public relations team of sharing too much personal information about the CEO X And LinkedIn account.
According to SECONDThe $20 billion fantasy sports and casino platform’s public relations team put out a post on CEO Jason Robins’ personal X account, formerly Twitter and on LinkedIn, stating: “There is potential There’s huge growth potential in new markets—but we’re still seeing really strong growth in the existing states. Our 2018-2019 State Classic grew over 80% on a year-over-year revenue basis in Q1. Given those numbers, we expect strong growth even without opening up new states.”
The SEC alleges that neither of those platforms were official sources of DraftKings and that information about the company’s developments should not have been shared with select audiences on LinkedIn and X. After the post was published posted online, DraftKings’ communications team immediately notified the PR company and the posts were taken down within half an hour. Even so, DraftKings did not release this information to the public or its investors for another seven days until its scheduled earnings release. The regulator said the selective disclosure breached rules requiring all investors to be given information at the same time, or Fair disclosure regulations.
“Information about sales growth as a public company can be extremely important to investors,” said John Dugan, Deputy Director of Enforcement in the SEC’s Boston Regional Office. invest”. “It is important that when companies disseminate material, non-public information, they do so in a manner that is fair to all investors.”
According to DraftKings’ Reg FD policy, the company has a “quiet period” when employees are prohibited from talking about financial or operating results. The SEC said DraftKings’ social media posts appeared on July 27, 2023 — before the quiet period ended on Aug. 4. For both LinkedIn and X posts, employees DraftKings has reviewed and approved the content. Doing so violated many internal social policies at DraftKings, which prohibit the use of blogs, social networks, chat boards, Facebookand other platforms to reveal important information that has not been made public, authorities said.
Without admitting or denying the SEC’s findings, DraftKings agreed to pay a $200,000 fine for the penalized posts.
A DraftKings spokesperson said Luck The company is “pleased to have this matter resolved.”
