SeaWorld Reaches Settlement with SEC Over Blackfish Controversy

SeaWorld Entertainment has reached a settlement with the Securities and Exchange Commission (SEC) regarding allegations of misleading statements and omissions related to the impact of the documentary film Blackfish on the company’s reputation and business. The settlement follows a complaint filed by the SEC in September 2018.

The SEC alleged that SeaWorld and its former CEO, James Atchison, made false and misleading statements in SEC filings, earnings releases, and calls, as well as other statements to the press, regarding the “Blackfish effect.” The documentary, released in 2013, criticized SeaWorld’s treatment of orcas and garnered significant media attention.

According to the complaint, SeaWorld failed to disclose the negative impact of Blackfish on its business to investors, which the SEC deemed as fraudulent behavior. Atchison, during the relevant period from January to March 2014, sold shares of SeaWorld stock, resulting in an inflated stock price and allowing him to avoid losses of approximately $730,860.

SeaWorld acknowledged the connection between declining attendance and negative publicity surrounding Blackfish in August 2014. This announcement caused a significant drop in the company’s stock price, resulting in a loss of approximately $830 million in shareholder value.

In addition to the settlement with SeaWorld, the SEC also filed a complaint against Frederick D. Jacobs, who allegedly made an untrue statement of material fact and/or omitted material facts before selling his SeaWorld stock, avoiding losses of around $84,885.

On October 4, 2018, SeaWorld, Atchison, and Jacobs consented to the entry of final judgments without admitting or denying the allegations. As part of the settlement, SeaWorld agreed to pay a civil penalty of $4 million, Atchison to pay disgorgement of $730,860, prejudgment interest of $119,323, and a civil penalty of $150,000, while Jacobs agreed to pay disgorgement of $84,885 and prejudgment interest of $14,720.

The funds paid by the defendants have been deposited into a Commission designated account at the United States Department of Treasury. The court has consolidated the two civil actions and established a Fair Fund to distribute the collected funds to harmed investors.

If you purchased SeaWorld securities between December 20, 2013, and August 12, 2014, you may be eligible for a distribution from the SeaWorld Fair Fund. To be considered for eligibility, submit a completed Proof of Claim Form to the Distribution Agent by the Claims Bar Date, which is October 19, 2023.

For more information about the SeaWorld Fair Fund, including the Distribution Plan, relevant deadlines, and the Claim Form, visit www.SeaWorldFairFund.com. You can also contact the Distribution Agent toll-free at (855) 533-0228 or email info@SeaWorldFairFund.com.

SeaWorld’s settlement with the SEC marks a significant step towards resolving the legal ramifications of the Blackfish controversy. The company remains committed to its ongoing efforts to improve animal welfare and enhance its reputation within the entertainment industry.