The Securities and Exchange Commission (SEC) and NBA have each reached out to scoreboard manufacturer Daktronics, seeking information about the company’s dealings with Kawhi Leonard.
This comes as the findings of the NBA-backed investigation into Leonard and the Los Angeles Clippers concerning alleged salary cap circumvention still have not been announced.
Howard Atkins, acting chief financial officer of Daktronics, disclosed the development Wednesday, Sept. 2 in an earnings call and said the company was cooperating.
“Let me now briefly address a matter that has been in the media concerning the NBA’s investigation of Kawhi Leonard and the Clippers in connection with the league’s collective bargaining agreement that many of you may have heard about,”
Atkins said during the call.
“As you might expect, we have received requests for information from the NBA. Additionally, the Securities and Exchange Commission is seeking information from us concerning the company and Mr. Leonard. We take these requests seriously and are cooperating. At this point, out of respect for the respective processes, we will not be providing further comment.”
It is unclear if this latest development may further delay the disclosure of the findings of the league’s investigation. Training camps are set to begin at the end of the month.
Kawhi Leonard investigation: What to know
In early August, the podcast “Pablo Torre Finds Out” reported on Daktronics’ alleged partnership with Leonard, which was the second such relationship to come under scrutiny. Previously, Leonard’s ties to a now-defunct green financial services company called Aspiration sparked an investigation into alleged no-show endorsement deals that purportedly funneled money to Leonard.
Daktronics, which is based in South Dakota, is the company that designed the video board inside the Intuit Dome, the home venue of the Clippers.
Torre had previously uncovered thousands of pages of legal documents, including a contract signed by Leonard for $28 million over a four-year term to market and endorse Aspiration, which previously received a significant investment from Clippers owner Steve Ballmer.
In the contract, a clause states that KL2 Aspire LLC, a company managed by Leonard, could “decline to proceed with any action desired by the Company,” which allegedly set up a framework for Leonard to receive payments without performing any work. Another clause states that Leonard would receive payments only if he continued to be a player on the Clippers.
Then, on Sept. 11, Torre reported that a December 2022 payment of $1.75 million to Leonard that had been running late, was made just nine days after a company led by Clippers minority owner Dennis Wong invested in Aspiration.
Clippers trade remains on hold
The Clippers and Raptors agreed June 30 to a trade that would send Leonard to Toronto, but both franchises released statements July 9, indicating that the execution of the trade was being delayed until the investigation had concluded.
Both teams also acknowledged that the NBA contacted each party and said the trade “can only be finalized if the Raptors’ ownership group assumes the risk of penalties related to Kawhi’s contract that could theoretically result from the ongoing investigation.”
The Clippers have undergone a youth movement as the team continues its rebuild. In February, the team traded James Harden to the Cavaliers and, in a different deal, Ivica Zubac to the Pacers. The Leonard deal earlier this summer signaled a desire to build for the future. Los Angeles finished ninth in the Western Conference with a 42-40 record and lost in the Play-In Tournament to miss the postseason.
In exchange for Leonard, the Clippers are set to receive Brandon Ingram, Gradey Dick, two first-round picks, one pick swap and two second-round picks.
This article originally appeared on USA TODAY: Kawhi Leonard investigation draws SEC interest in Daktronics
