DraftKings Inc. agreed to pay a $200,000 penalty to settle charges from the U.S. Securities and Exchange Commission (SEC) regarding selective disclosure of material non-public information. The SEC announced on Thursday that the sports betting company shared performance updates on social media accounts rather than to all investors.
The violations stemmed from posts made on July 27, 2023, on CEO Jason Robins' personal X and LinkedIn accounts, stating the company was experiencing 'really strong growth.' These posts were deleted shortly after publication, and the information was not publicly disclosed until the company's quarterly results were released seven days later.
As part of the settlement, DraftKings did not admit or deny the SEC's findings but agreed to cease and desist from future violations. The company also committed to paying the civil penalty and implementing Regulation FD training for employees with corporate communications responsibilities, emphasizing the need for fair disclosure to all investors.
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