SEC Investigating Disney

According to a whistleblower, employees in Disney’s park and resorts segment have systematically overstated revenue for years by exploiting weaknesses in the company’s accounting software. The whistleblower, formerly a senior financial analyst in Disney’s revenue-operations department, says she has met with officials from the SEC several times to discuss the allegations. MarketWatch, which broke the story, has reviewed the filings. They describe several ways revenue was boosted, including recording fictitious revenue for complimentary golf rounds or free guest promotions, and recording revenue for $500 gift cards at their face value when guests paid a discounted rate of $395. A Disney spokesperson said the whistleblower’s claims were “utterly without merit,” but according to MarketWatch she has spoken with the SEC by phone and met with them in person more than once, a pattern of interaction that suggests the allegations are being taken seriously. The SEC declined to comment.