SEC and NBA probe Daktronics over Kawhi Leonard connection

The Securities and Exchange Commission (SEC) and the NBA are both seeking information from Daktronics regarding the company’s relationship with NBA player Kawhi Leonard and the LA Clippers. Daktronics acting CFO Howard Atkins confirmed the requests for information during a recent quarterly earnings call, stating that the company is cooperating with both entities.

The inquiries follow reports alleging that Leonard had an undisclosed multi-million dollar sponsorship agreement with Daktronics. This comes amid a broader NBA investigation into potential salary cap circumvention involving the Clippers. That investigation initially focused on a $28 million endorsement deal between Leonard and Aspiration, a company in which Clippers owner Steve Ballmer had invested significant capital.

While the SEC has not accused Leonard, Ballmer, or the Clippers of wrongdoing, the involvement of a federal agency marks a significant escalation in the scrutiny surrounding the team’s financial dealings and sponsorship agreements.