SEC Charges Walt Disney with Disclosure Violations

The Securities and Exchange Commission on Monday instituted settled enforcement proceedings against The Walt Disney Company (Disney). The Commission charged Disney for failing to disclose certain related party transactions between Disney and its directors, and for failing to disclose certain compensation paid to a Disney director. Under the settlement, Disney consented to the entry of an Order that it cease and desist from violating the proxy solicitation and periodic reporting provisions of the federal securities laws.


Advertisement


AccountingWEB is pleased to bring you tools that can help systematize the accounting department of a small company, corporate business or a public accounting firm. Over 200 accounting department policy templates, written in Microsoft Word format by PolicySoft, are available individually or in groups for immediate download.


Accounts Payable General Accounting Department
Accounts Receivable General Ledger
Credit & Collections Payroll
Fixed Assets Shipping & Receiving



“Shareholders have a significant interest in information regarding relationships between the company and its directors,” said Linda Chatman Thomsen, Deputy Director of the SEC’s Division of Enforcement. “Failure to comply with the SEC’s disclosure rules in this area impedes shareholders’ ability to evaluate the objectivity and independence of directors.”

The Commission found that between 1999 and 2001, Disney failed to disclose relationships between the company and its directors which were required to be disclosed in its proxy statements and annual reports filed with the Commission.

In particular, Disney failed to disclose that the company employed three children of its directors, who received annual compensation ranging from $60,000 to more than $150,000. In addition, Disney did not disclose that the spouse of another director was employed by a subsidiary 50% owned by Disney and received compensation in excess of one million dollars annually. Further, Disney failed to disclose that it made regular payments to a corporation owned by a Disney director that provided air transportation to that director for Disney-related business purposes. Finally, Disney failed to disclose that it provided office space, secretarial services, a leased car, and a driver to another Disney director, services valued by the company at over $200,000 annually.

The Commission concluded that Disney’s failed disclosures violated Sections 13(a) and 14(a) of the Securities Exchange Act of 1934 and Rules 13a-1, 12b-20, and 14a-3(a) thereunder. Without admitting or denying the Commission’s findings, Disney consented to the issuance of the Commission’s Order, which requires Disney to cease and desist from committing or causing any violations and any future violations of the foregoing statutory provisions and rules.

Source, SEC

You may like these other stories...

The US Securities and Exchange Commission (SEC) has chosen a former partner and vice chairman with Deloitte LLP as its new chief accountant.James Schnurr, who specialized in financial and SEC reporting for public companies...
Summer is a time for kicking back and playing a few round of golf with friends, for example. But if you're on the green, you'd better be careful: The SEC may be looking over your shoulder.In July, the SEC announced...
An examination initiative launched by the US Securities and Exchange Commission (SEC) earlier this week will enable the agency to evaluate whether municipal advisors are complying with new SEC rules that went into effect...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.