The NBA's investigation into cap circumvention involving the Los Angeles Clippers and Kawhi Leonard has stretched on for nearly a calendar year, with the league's probe expanding recently from the questionable endorsement deal with Aspiration to a second deal with scoreboard manufacturer Daktronics.
That saga took another twist on Wednesday when Daktronics CFO Howard Atkins told investors on the company's earnings call that Daktronics had not only received inquiries from the NBA regarding that deal, but also from the Securities and Exchange Commission and that the company was fully cooperating into the federal probe into their dealings with Leonard, via Matt Sullivan of the Pablo Torre Finds Out podcast.
"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. As you might expect, we have received requests for information from the NBA," Atkins said. "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."
An SEC investigation into Daktronics and Leonard adds another layer of intrigue to the situation, as well as some questions about what the SEC is concerned with regarding the deal. The SEC wouldn't have interest in the NBA's collective bargaining agreement, meaning they believe this could potentially be something that goes beyond a violation of the CBA and delves into potential financial crimes.
At this point, it seems the SEC's probe is in the early stages of collecting information, but it further complicates what is already a messy situation for the Clippers, Leonard and the NBA. Leonard remains in limbo after the Toronto Raptors put their trade with the Clippers for the star wing on hold due to the ongoing investigation.
Reports emerged in August that the NBA's investigation lacked the kind of hard evidence to tie Steve Ballmer and the Clippers to outright cap circumvention, but two weeks have passed since that report, and the league investigation remains open.
It's unclear whether the SEC probe into the Daktronics deal will have any impact on the NBA's investigation, but nearly a year into this saga, the only constant has been uncertainty about what will come next.
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