Kawhi Leonard faces SEC scrutiny after Clippers NBA punishment

Kawhi Leonard may think he’s headed for a clean slate in Toronto, but the scandal he is leaving behind in Los Angeles apparently isn’t ready to let him go just yet. 

Mere hours before the NBA concluded its nearly yearlong investigation into Leonard and the LA Clippers Wednesday, Daktronics disclosed that the Securities and Exchange Commission is seeking information concerning the South Dakota-based company — which built the $100 million video board inside the Clippers’ Intuit Dome — and its relationship with Leonard.

“As you might expect, we have received requests for information from the NBA,” Daktronics acting CFO Howard Atkins said during an earnings call with investors. “Additionally, the Securities and Exchange Commission is seeking information from us concerning the company and Mr. Leonard.”

Atkins said Daktronics is cooperating with both investigations..

The revelation adds another potentially serious layer to a scandal Leonard seemed prepared to put behind him.

The NBA concluded Wednesday that the Clippers and Leonard violated league salary-cap circumvention rules, stripping Los Angeles of five first-round draft picks, fining owner Steve Ballmer $30 million and suspending him and multiple team officials. Leonard was fined $700,000.

Leonard has since fired his uncle, Dennis Robertson, as his manager and agent, accepted his punishment and is preparing for a fresh start in Toronto once his delayed trade to the Raptors is completed. Robertson was banned by the NBA concerning all business dealings.

But the SEC doesn’t operate under the NBA rulebook.

Daktronics entered everyone’s radar after investigative journalist Pablo Torre of “Pablo Torre Finds Out” reported in August that Leonard allegedly received a multimillion dollar sponsorship agreement from the scoreboard manufacturer despite performing no apparent promotional work for them. 

The allegations echoed the original Aspiration controversy, in which Leonard was reportedly paid millions through a sponsorship arrangement that became the centerpiece of the NBA’s investigation. 

What was so strange about the Daktronics allegations was that the company primarily sells to businesses and institutions, rather than consumers, making a celebrity endorsement — their first one ever — far less conventional. 

According to Torre, a former employee revealed that they had never had a similar sponsorship arrangement during more than two decades with the company. 

What the SEC is specifically examining remains unclear, as does whether its inquiry will ultimately produce any enforcement action.

After all, an SEC investigation is not proof that Leonard, Daktronics or anyone else violated federal law. 

But it does mean Wednesday’s NBA ruling might not be the ending Leonard hoped it would be. 

He can change teams. He can change representation. He can pay the hefty fine and hope for a fresh start. 

But that dark and stormy cloud currently hovering over Los Angeles may be following him to Toronto.

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