DraftKings has agreed to pay a $200,000 civil penalty after being charged by the US Securities and Exchange Commission (SEC) for selectively disclosing material, nonpublic information to investors via CEO Jason Robins’ social media accounts.
Within its release, the SEC noted that since the same information wasn’t disclosed to all investors, this violated Regulation Fair Disclosure, so a civil penalty was issued to DraftKings to settle the charges.
In an order dated 26 September, the SEC stated that on 27 July 2023, DraftKings’ public relations firm published a post on Robins’ personal X and LinkedIn accounts.
The X post read: “There’s massive potential for growth in new markets — but we’re still seeing really strong growth in existing states. Our 2018-2019 state vintage grew over 80% on the revenue basis year-over-year in Q1. With those numbers, we expect robust growth even without new states opening.”
A similar statement was also published on the DraftKings CEO’s personal LinkedIn account on the same day. Yet, at the time of those posts, the operator hadn’t published its second quarter 2023 financial results, nor had it otherwise publicly disclosed certain information contained in the posts.
Shortly after the posts were published, the public relations firm removed both posts at the request of DraftKings.
Following an SEC investigation, DraftKings was charged with violations of Section 13(a) of the Exchange Act and Regulation FD.
The order stated that even though DraftKings was required by Regulation FD to promptly disclose the information to all investors after it was selectively disclosed to some, the information was not disclosed to the public until seven days later when the operator’s Q2 2023 financials were published.
“Information about growth in sales as a public company can be extremely important to investors,” commented John Dugan, Associate Director for Enforcement in the SEC’s Boston Regional Office.
“It is essential that, when companies disseminate material, nonpublic information, they do so fairly to all investors.”
The SEC added that “while companies can use social media outlets to announce key information in compliance with Regulation FD, investors must first have been alerted about which social media will be used to disseminate such information”.
“Without admitting or denying the order’s findings, DraftKings agreed to cease and desist from future violations of the charged provisions, pay the civil penalty referenced above, and comply with certain undertakings, including required Regulation FD training for employees who have corporate communications responsibilities,” read the SEC’s statement.
Relax Gaming has added to its leadership team with the appointment of Enrico Bradamante as Chief Growth Officer (CGO).
As CGO, Bradamante will seek to enhance Relax’s growth strategy, working with the igaming provider’s commercial team and other departments to recognise opportunities and drive innovation.
Based at the company’s Malta office, Bradamante will also help Relax expand its footprint in key markets and stay on top of industry trends.
“I am delighted to be joining the leading provider and aggregator, Relax Gaming, at such an important juncture,” commented Bradamante.
“I very much look forward to working with Martin and the talented team at Relax to help unlock further growth by driving differentiation, increased speed-to-market and data-driven decision-making.”
Bringing over 12 years of industry experience to Relax, Bradamante has previously served as the Managing Director at NetEnt and the Chief Commercial Officer at Aristocrat Interactive. He is also the Chair and Founder of iGEN (iGaming Executives Network).
Martin Stålros, CEO at Relax Gaming, added: “We are thrilled to welcome Enrico to the Relax Gaming executive team. His wealth of experience and deep understanding of the igaming industry will be instrumental in further driving our growth strategy.
“Enrico’s expertise will help us continue to differentiate ourselves in an increasingly competitive market, and I look forward to working closely with him as we enter this exciting phase of expansion.”
