Boyd Gaming Fined 0K in Indiana After Failing to Disclose Review into Executive
Boyd Gaming agreed to pay a $150,000 fine to the Indiana Gaming Commission (IGC) after the regulatory agency determined the Las Vegas-based gaming company did not reveal a former executive and license holder was the subject of an internal investigation.
According to an order approved at Tuesday’s commission meeting, the former executive had a sexual relationship with another executive within the company, which went against Boyd’s anti-fraternization rules.
The issue came to light on June 23. That’s when Boyd notified the IGC that it entered into an agreement with the Pennsylvania Gaming Control Board (PGCB) for failing to notify the PGCB about the incident.
The PGCB fined Boyd $150,000 at its June meeting.
In Indiana, Boyd operates the Belterra Casino Resort in Florence and the Blue Chip Casino Hotel Spa in Michigan City.
Boyd Punished Retiring Exec for Violating Policy
Indiana law requires casino licensees to notify the IGC when they face criminal, civil or administrative action. The law also requires notification when such actions are threatened.
According to the order, Boyd’s Board of Directors received a demand letter on July 1, 2019, from a female executive who was working for the company at the time but sought to depart. An attorney representing the female executive made several claims in the letter, including that she was “forced to engage in inappropriate sexual activity” with a male executive. The male executive was not named in the letter.
The demand letter led to Boyd’s Board forming a special committee to investigate the claims.
Two months later, in September 2019, the male executive discussed his possible retirement with the company’s CEO. Eventually, that male executive became a subject of the special committee’s review.
By early October 2019, the male executive admitted a consensual relationship with the female executive. The relationship happened about a decade before the investigation started, the IGC order said.
A report from the special investigation was discussed at Boyd’s Dec. 5, 2019, Board meeting. That report concluded that the male executive violated company policy against fraternization. However, it was unable to determine if the female executive to coerced into the relationship.
Boyd considered the matter an internal issue, and the male executive retired on Dec. 9, effective six days later. The IGC order said the company denied the male executive his yearly cash bonus. He also did not receive his career restricted stock shares.
Disclosure was Necessary, According to IGC
While the IGC order did not name either the male or female executive, it stated that the male executive served as the executive vice president, secretary, and general counsel to Boyd. A search of the company’s Securities and Exchange Commission disclosures found that Boyd reported Brian Larson retired from that position on the same date.
Boyd reported Larson’s retirement to the IGC on Dec. 16, 2019, as he held a Level 1 license in Indiana. However, that report did not include Larson was part of a special investigation, nor did it disclose any of the findings from that review.
Therefore, Licensee failed to report material information on a Level 1 licensee with the Commission that could question his suitability for licensure in Indiana,” the IGC order stated. “Even though the male executive was surrendering his license due to retirement, this material information should have been provided to the Commission, giving the Commission the opportunity to conduct a suitability review.”
A spokesperson for Boyd told Casino.org that the company had nothing further to add on the matter.
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