SEC files Charges Against Walt Disney Co., Directors

Discussion in 'Movies' started by Ernest Rister, Dec 20, 2004.

  1. Ernest Rister

    Ernest Rister Producer

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    US SEC says charges Disney over director relationships

    WASHINGTON, Dec 20 (Reuters) - The U.S. Securities and Exchange Commission said on Monday that it charged 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 the company employed three children of its directors, that a subsidiary employed the spouse of another director, and other violations.

    -- Reuters

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    Can't wait to hear the Roy Disney press release on this one (although Roy himself was a "family member", so his statement should be interesting)...
     
  2. Ernest Rister

    Ernest Rister Producer

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    The Securities and Exchange Commission charged Disney (DIS:NYSE - news - research) Monday with failing to disclose relationships between the company and its directors.

    In settling the charges, the Burbank, Calif., media conglomerate consented to an order barring it from breaking securities laws.

    The SEC found that between 1999 and 2001, Disney failed to disclose relationships between the company and its directors in proxy statements and annual reports.

    In particular, the agency says, Disney failed to disclose that the company employed three children of directors who received annual compensation ranging from $60,000 to more than $150,000. Disney also didn't disclose that the spouse of another director was employed by a subsidiary half-owned by Disney and received compensation in excess of one million dollars annually.

    Finally, the SEC says 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. It also 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.

    Early Monday, Disney rose 15 cents to $27.52.

    --thestreet.com

    ***************

    "The SEC did not fine Walt Disney (up $0.04 to $27.41, Research) for its lapse. Instead, the company agreed not to violate federal disclosure and reporting laws in the future.

    The sanction comes as Walt Disney directors are under attack in a separate case now at trial in Delaware state court. In that case, shareholders have accused company directors of negligence in the mid-1990s hiring and firing of Michael Ovitz, a onetime star Hollywood talent agent who was given a severance package valued at $140 million after serving as Disney's president for less than 15 months.

    The trial began in October and is ongoing. Disney shareholders are seeking repayment of Ovitz's exit package. Disney directors deny all wrongdoing.

    In announcing Monday that Disney directors' failed to disclose certain family relationships, Linda Chatman Thomsen, the deputy director of the SEC's Division of Enforcement, took the opportunity to remind companies of their duty to their shareholders.

    "Shareholders have a significant interest in information regarding relationships between the company and its directors," said Chatman 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," she said."

    --CNNmoney.com
     
  3. Edwin Pereyra

    Edwin Pereyra Producer

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  4. oscar_merkx

    oscar_merkx Lead Actor

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    thanks for the update on this
     
  5. GeorgePaul

    GeorgePaul Second Unit

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    The relationships Disney has between its directors and regulators are much too snug. Even a casual observer could figure this out, yet the Disney name usually squelches any major objections.

    Again, the bottom line is that for the good of America's families, Michael Eisner needs to be stripped of power--and the sooner, the better.
     

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