SeaWorld Entertainment and its former chief executive will pay $5 million in fines for misleading investors about damage from a documentary film about its treatment of killer whales, US regulators announced Tuesday. Former CEO James Atchison and the firm - which operates SeaWorld and other theme and water parks in across the United States - lied to investors and the media between 2013 and 2014 about harm to its reputation from the movie Blackfish, the Securities and Exchange Commission said.
The widely distributed film drew a harsh portrait of the company and its treatment of orcas, also known as killer whales. The company denied the charges made in the film, which also documented the death of a trainer by one of the captive orcas, but acknowledged in August 2014 that declining attendance was in part due to negative publicity.
SeaWorld Entertainment's stock price fell and caused "significant losses" to investors, the SEC said 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," Steven Peikin, the SEC's co-chief of enforcement, said in the statement.
To resolve the SEC's charges, SeaWorld Entertainment will pay $4 million while Atchison will pay $1 million. The company and the former executive neither admitted nor denied wrongdoing.
Meanwhile, the company's former vice president for communications, Frederick Jacobs, agreed pay $100,000 in disgorgement, or the return of ill-gotten gains, but was not fined in return for cooperating with investigators. The company faced criticism from animal rights groups over its treatment of orcas, which opponents say were kept in tanks that are too small, fed improper diets and forced to perform tricks. Under public pressure, SeaWorld announced in March 2016 it would stop breeding killer whales, and would no longer keep any of them in captivity after its current generation dies.