DraftKings will pay a $200,000 fine for selectively disclosing material nonpublic information through its executives’ social media accounts, the Securities and Exchange Commission (SEC) said. According to the SEC, the posts by Jason Robins, DraftKings’ head of public affairs, talked about the sportsbook company’s “massive growth.” A similar post appeared on the CEO’s account.
However, at the time, DraftKings had not yet disclosed its financial results for the second quarter and did not publicly share the information contained in the posts.
The posts were removed shortly after publication at the company’s request, but DraftKings failed to provide the same information to all investors until it announced its second-quarter earnings a week later.
“When companies disseminate material nonpublic information, it is important that they do so in a manner that is fair to all investors,” said John Dugan, deputy director of enforcement for the SEC’s Boston Regional Office. The SEC found that DraftKings violated Section 13(a) of the Securities Act and the Fair Disclosure (FD) Regulation, which requires companies to provide all investors with equal access to material information.
