DraftKings to Pay $200,000 for Disclosure Violations: US SEC Reports

DraftKings has been fined $200,000 for improperly disclosing significant non-public information on social media, instead of sharing it with all investors. This penalty was announced on Thursday by the U.S. Securities and Exchange Commission (SEC).

In July of the previous year, DraftKings’ public relations agency posted on social media platforms, highlighting the company’s “strong growth” before the release of its second-quarter financial results. The SEC reported that despite the nature of the claims, DraftKings waited a week to inform all investors after requesting the posts be removed.

John Dugan, associate enforcement director in the SEC’s Boston office, emphasized the importance of equitable information dissemination, stating, “It is essential that, when companies disseminate material, non-public information, they do so fairly to all investors.”

The SEC also noted that companies using social media to convey crucial information must notify investors in advance about which accounts will be utilized for such announcements.

Currently, representatives from DraftKings have not provided a response to requests for comments on the situation.