DraftKings fined for CEO’s LinkedIn post

According to the SEC, the public relations team for the $20 billion fantasy sports and casino platform published a post on ex-Twitter CEO Jason Robins’ personal X account and LinkedIn, stating: “There is massive potential for growth in new markets, but we still see very strong growth in existing states. Last state year 2018-2019 was up over 80% on year-over-year revenue in Q1. With these numbers, we expect robust growth even without the opening of new states.”

None of these platforms is an official source for DraftKings, and information about the company’s growth should not have been shared with the selective audiences on LinkedIn and X, the SEC argued. After the posts went live, DraftKings’ communications team immediately alerted the PR firm and the posts were removed within half an hour. Even so, DraftKings did not release the information to the general public or its investors for another seven days until the scheduled earnings release. The regulator said the selective disclosure breached rules requiring all investors to receive information at the same time, or the Fair Disclosure Regulation.

“Information about sales growth as a public company can be extremely important to investors,” said John Dugan, associate director of enforcement in the SEC’s Boston regional office. “It is critical that when companies disclose material, non-public information, they do so fairly to all investors.”

According to DraftKings Reg FD policy, the company has a “quiet period” when employees are prohibited from talking about financial or operational results. DraftKings’ social media posts appeared on July 27, 2023 — before the quiet period ended on August 4. With respect to both the LinkedIn and X posts, DraftKings staff reviewed and approved the content, the SEC said. That violated several of DraftKings’ internal social policies, which prohibit the use of blogs, social media, chat forums, Facebook and other platforms to disclose material information that has not been made public, authorities said.

Without admitting or denying the SEC’s findings, DraftKings agreed to pay a $200,000 penalty for the penalized positions.

A DraftKings spokesperson said wealth the company is “pleased to resolve this issue.”