MANHATTAN (CN) – SeaWorld and its former CEO reached a $5 million Securities and Exchange Commission settlement Tuesday in connection to fallout from the documentary “Blackfish.”
Directed by Gabriela Cowperthwaite, “Blackfish” investigated the circumstances of the 2010 killing of a SeaWorld trainer by an orca and was highly critical of SeaWorld’s treatment of its whales.
In August 2013, one month after “Blackfish’s” theatrical release, SeaWorld reported that attendance in the second quarter dropped from the prior year, but told the press at the time that it could “attribute no attendance impact at all to the movie.”
A year later, when SeaWorld finally acknowledge the impact that the film and negative publicity had on attendance, SeaWorld’s stock price fell 33 percent from $28.15 to $18.90, causing a loss of approximately $830 million in shareholder value.
The SEC detailed the fraud this morning in an announcement of a settlement and simultaneously filed complaint against the park and ex-CEO James Atchison .
In addition to the $4 million civil penalty against SeaWorld, former CEO James Atchison, of Windermere, Florida, must pay more than $1 million. Atchison’s settlement includes the disgorgement of $730,860 for SeaWorld stock sold at inflated prices during the relevant period, along with $119,323 prejudgment interest and a $150,000 civil penalty.
“SeaWorld and Atchison should have known by December 20, 2013, that Blackfish was having a negative effect on the company’s reputation and/or business relationships, and, as the Relevant Period progressed, should have known that the Blackfish effect was becoming more pronounced,” the complaint states.
In a separate filing, former SeaWorld vice president of communications Frederick Jacobs agreed to settle a fraud charge and to pay disgorgement and prejudgment interest of approximately $100,000.
SeaWorld was represented in the case by Jonathan Youngwood of Simpson Thacher & Bartlett.
Atchison was represented by Michael Diver with Katten Muchin Rosenman.
Representatives for SeaWorld and Atchison did not immediately respond to requests for comment Tuesday afternoon.