It’s hard to think of another instance where a single movie had more of an impact on a company’s reputation and market value than Blackfish had on SeaWorld. The 2013 documentary, which purported to reveal systemic mistreatment of orca whales at the resort, sparked a nationwide debate about the ethics of keeping the majestic animals in captivity.
After its release on CNN the following year, SeaWorld Entertainment’s stock plummeted, and that continued for years. It was only recently that the company has started to recover—shares have roughly doubled in the last six months.
That doesn’t mean that SeaWorld isn’t still paying a price. The U.S. Securities and Exchange Commission (SEC) said today that the company and its former CEO, James Atchison, have agreed to pay $5 million to settle charges that they misled investors about the impact the movie was having on its reputation and business.
The agreement stems from anti-fraud charges filed by the SEC in federal court in New York that allege that SeaWorld and Atchison made “untrue and misleading statements or omissions” in SEC filings, earnings releases, and statements to the press. The company’s former VP of communications has also agreed to settle a charge concerning his role in the alleged fraud.
“This case underscores the need for a company to provide investors with timely and accurate information that has an adverse impact on its business,” said Steven Peikin, co-director of the SEC’s enforcement division, in a statement. “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.”
Atchison left SeaWorld in 2014. He and SeaWorld neither admitted to nor denied the SEC’s charges, but agreed to pay $1 million and $4 million, respectively.
A spokesperson for SeaWorld provided Fast Company with the following statement:
The company is pleased to have resolved this matter and to continue to focus on delivering superior guest experiences, world-class animal care, and rescuing animals in need. The company cooperated with the Commission throughout the process, and the Commission approved the settlement on September 18, 2018.