WASHINGTON, D.C. (Reuters) — The U.S. Securities and Exchange Commission said Dec. 20 that it had charged entertainment group Walt Disney Co. for failing to disclose relationships between the company and its directors.
The SEC said Disney consented to a cease-and-desist order in the case involving failure to disclose that between 1999 and 2001, it employed three children of directors who were paid $60,000-$150,000 annually.
Disney also did not disclose that a 50%-owned subsidiary employed the spouse of another director, and that the spouse was paid more than $1 million per year, the SEC said.
Additionally, the commission said, Disney failed to tell investors that it paid a company owned by a Disney director that provided air transportation to that director for Disney business.
Finally, the company failed to disclose that it provided office space and other services valued at more than $200,000 annually to another Disney director.
An attorney for Disney could not immediately be reached.
“Shareholders have a significant interest in information regarding relationships between the company and its directors,” said SEC deputy enforcement director Linda Thomsen in a statement. “Failure to comply with the SEC’s disclosure rules in this area impedes shareholders’ ability to evaluate the objectivity and independence of directors.”
