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DraftKings will pay $200,000 to SEC
DraftKings will pay $200,000 to the Securities and Exchange Commission (SEC) for social media disclosure issues.
The issue comes from posts made by the company’s CEO, Robins, on X (formerly Twitter) and LinkedIn, which the SEC determined violated Regulation Fair Disclosure (Regulation FD).
In compliance with this regulation, companies have to share all the important news and information with their investors at the same time to stop certain groups from getting an unfair edge.
Last year, on July 27, Robins made several posts where he highlighted DraftKings’ impressive revenue growth. Meanwhile, DraftKings didn’t publicly announce these details until a week later, when it released its second-quarter earnings report.
Even though DraftKings asked its CEO to remove the posts, the SEC made it clear that this didn’t resolve the issue.
According to the SEC, DraftKings will not only pay $200,000 but will also start training its employees who are involved in corporate communications to prevent similar issues in the future.
DraftKings’ legal troubles
This issue is being added to DraftKings’ ongoing legal troubles, including lawsuits from major sports leagues over the use of player names and images and mistakenly sent emails. Moreover, in the summer, the company received a lawsuit from the NFLPA over NFTs.
All these regulatory actions are being taken to ensure that companies work in compliance with the rules and regulations of the market.
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