Reuters is reporting that the entertainment company has agreed to a cease-and-desist order pledging to not violate disclosure rules in the future. No monetary damages were paid.
In a Web site statement , the SEC accused Disney of, among other things, failing to disclose the fact that between 1999 and 2001, the company employed three adult children of board members. Board members Reveta Bowers, Stanley Gold and Raymond Wilson all had children employed by the company during these years that were paid between $60,000 and $150,000, according to Reuters. Bowers and Watson have both retired, and Gold has quit the board to campaign alongside Roy Disney to oust current CEO Michael Eisner.
The SEC also stated that Disney did not disclose that a unit partially owned by the company employed Director John Bryson’s wife, who earned a salary of more than $1 million annually, according to Reuters. She was hired a year before Bryson took a post on the board, but her job was not disclosed until August 2002.
The company also failed to tell investors about a business relationship with Air Shamrock, which is an airline owned by Roy Disney and run by Gold. Additionally, the SEC charged that Disney failed to disclose that they provided office space and other services to board member Thomas Murphy. These services totaled $200,000 annually, Reuters is reporting.
Disney would not comment on the SEC action, according to the news agency.