Boyd Gaming Fined $150K For Failure to Disclose Review on Executive

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The Indiana Gaming Commission has fined Boyd Gaming $150,000 after determining that the gambling operator did not disclose that a former executive and license holder was a subject of an internal investigation.

According to an order approved at the Commission’s Assembly Fee last Tuesday, the said executive was under investigation after having a sexual relationship with another executive in the company which was in violation of Boy’s anti-Fraternization policy.

The matter became an issue with the IGC after Boyd Gaming notified the commission that it entered into a settlement agreement with the Pennsylvania Gaming Control Board for its failure to notify the PGCB about the incident.

Boyd Punished Exec for Violation of Policy

Boyd’s Board of Directors received a demand letter on July 1, 2019 from one of its female executives. Among the claims made in the letter was that the female executive was forced to engage in an inappropriate sexual relationship with a male executive who was not named in the letter. That letter led to the company forming a special committee to investigate the accusations.

In a December 2019 report the special committee concluded that the male executive violated Boyd’s anti-fraternization policy and punished him by denying his yearly cash bonus and his career restricted stock shares. However, the investigation failed to determine whether the female executive was coerced into the sexual relationship.

IGC Ruled that Disclosure was Necessary

Although the IGC order did not name th male executive, it stated that he served as Boyd’s executive vice president, secretary and general counsel. Public disclosures from the Securities and Exchange Commission however, reveal that Boyd reported a certain Brian Larson retiring on December 9, 2019. Boyd reported Larson’s retirement to the IGC on December 16, 2019 since he held a Level 1 license in the state. However, the report did not indicate that he was part of a special investigation.

The IGC later ruled that disclosure of the executive’s investigation was necessary as such material information could question the suitability of his state license. Although the said male executive was due to surrender his license due to retirement, the IGC said that disclosure should have been done to give the commission the opportunity to conduct a suitability review.