Disney’s been accused by a whistleblower of inflating its revenue for years in the parks-and-resorts division, according to a report from MarketWatch on Monday.
As recently as June, former Disney financial analyst Sandra Kuba filed a complaint with the Securities and Exchange Commission claiming that the company has inflated its revenue by as much as $6 billion in the 2008-2009 fiscal year alone.
Disney has called Kuba’s accusations “utterly baseless.”
Kuba told MarketWatch that practices by employees working in the parks-and-resorts division took advantage of weaknesses in the company’s accounting software.
In it’s 2009 annual filing with the SEC, Disney’s parks and resort division reported revenue of $10.7 billion.
Kuba first noticed the revenue recognition and reported it to Disney management in 2013, according to MarketWatch. She told the financial news website that she has filed a series of complaints with the SEC beginning in August 2017, after escalating her concerns to Disney executives in 2016.
The SEC told TheWrap that it “neither confirms nor denies the existence or nonexistence of investigations.”
A Disney spokesperson said via email: “This former employee, who was fired for cause, has persistently made patently false claims for over two years. 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 Kuba’s SEC filings, which were obtained by MarketWatch, the 18-year Disney employee said employees at the parks and resort division would boost revenue a number of ways, including recording fictitious revenue for complimentary golf rounds or for free guest promotions. She also said they’d record the full revenue for $500 gift cards, even when guests paid a discounted rate of $395.
Kuba also accused employees of sometimes recording gift card revenue twice, once when guests bought the gift card and again when it was used at a resort. MarketWatch reported that revenue was even sometimes recorded when a gift card was given to a guest for free.
Kuba told MarketWatch that she withdrew a claim filed with challenging her termination but reserves the right to resubmit it and continues to dispute Disney’s decision to fire her.
She also told the outlet she has talked with officials from the SEC on more than one occasion, including as recently as last week, to discuss the accusations in her filings. According to MarketWatch, the SEC has shown interest in the claims, requesting additional documentation related to the accusations.