ORLANDO, Fla. -- SeaWorld Entertainment is still dealing with the effects of the documentary "Blackfish."
- SeaWorld, former CEO to settle SEC fraud charges
- Regulators say SeaWorld failed to disclose ' "Blackfish" effect'
- Film criticized the treatment of orcas at SeaWorld
The Orlando-based theme park operator and its former CEO, James Atchison, have agreed to pay more than $5 million to settle Securities and Exchange Commission fraud charges.
The SEC on Tuesday filed a civil complaint against SeaWorld and Atchison, claiming they failed to disclose to investors the negative impact that the 2013 film had on its business, including attendance at the theme parks.
"Blackfish" criticized the treatment of orcas in captivity at SeaWorld's parks.
The complaint states that between Dec. 20, 2013 and Aug. 13, 2014, SeaWorld and Atchinson failed to disclose the detrimental " 'Blackfish' effect" to SeaWorld investors and on required SEC registration filings, deceiving shareholders.
The compliant goes on to say SeaWorld and Atchison should have known by December 2013 that "Blackfish" was hurting its business because, among other reasons:
- Even before "Blackfish" was released in July 2013, SeaWorld executives expressed concern about the movie's potential impacts on business;
- News articles published in the press at the time suggested as much;
- Seaworld routinely described its reputation as one of its "most important assets," though a corporate reputation study conducted in August 2013 said the company's score had fallen by nearly 13 percent, which Atchison described as "painful";
- And several high-profile musical acts had canceled their SeaWorld performances, citing the events depicted in "Blackfish." The SEC complaint said: "As a senior officer in SeaWorld’s communications department put it in an email, SeaWorld's reputation at that point was 'positively radioactive.' "
Instead of acknowledging the company's reputation hit, executives "made untrue or misleading statements" about the film's effects.
According to the SEC, SeaWorld waited until August 2014 to acknowledge that declining attendance was caused in part by negative publicity from "Blackfish."
SeaWorld has struggled in the years since the film was released. In 2016, then-CEO Joel Manby announced the end of SeaWorld's orca breeding program. Manby also announced plans for new attractions at the parks.
Manby stepped down in February.
SeaWorld has agreed to pay $4 million, while Atchision has agreed to pay more than $1 million.