A former Walt Disney accountant reportedly accused the company of systematically overstating its revenue by billions of dollars for years in a series of whistleblower tips with the U.S. Securities and Exchange Commission, sending shares of the company down on Monday.
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According to a MarketWatch report, Sandra Kuba, a former senior financial analyst in Disney’s revenue-operations department who worked with the company for 18 years, alleged in the filings that employees working in the parks-and-resorts business overstated revenue — sometimes by as much as $6 billion — by exploiting weaknesses in Disney’s accounting system that allowed the inaccuracies to remain undetected.
The SEC declined to comment.
A Disney spokesperson told FOX Business pushed back against the claims, which they said were false, and criticized MarketWatch for publishing the allegations.
“This former employee, who was fired for cause, has persistently made patently false claims for over two years," the spokesperson said. "The claims she made to the company were thoroughly investigated and found to be utterly baseless. It is unfortunate that MarketWatch, which has been aware of the facts for months, knowingly and deliberately chose to give Ms. Kuba’s unfounded claims a platform.”
In the filings, which were reviewed by MarketWatch, Kuba claimed employees boosted revenue by several different methods, including record fictitious revenue for complimentary rounds of golf or for free guest promotions. Kuba also alleged that employees recorded revenue twice for gift cards, both when guests bought the card and when they used it at a resort, and sometimes recorded gift card revenue at face value even if park guests paid a discounted price.
Kuba said she reported the alleged revenue-boosting to senior management several times, first beginning in 2013, but that Disney’s corporate audit group never followed up. She eventually brought her concerns to the SEC in 2017 and was fired from Disney one month later, she told MarketWatch. (Disney said they fired her because “she displayed a pattern of workplace complaints against co-workers without a reasonable basis for doing so, in a manner that was inappropriate, disruptive and in bad faith.”)
Shares of Disney dropped after the report was published, shedding about $2 per share.