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Cloud9 Slapped With Hefty Fine By Riot

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Cloud9 Slapped With Hefty Fine By Riot
Source: wikimedia.org

Riot Games has fined eSports operator Cloud9 for the supposed violation of a 2017 League of Legends equity stock competition rule. Riot prohibits League Championship Series players from owning any portion of a team for which they have played or are currently playing for. By the same token, team owners are not permitted to engage in actual competition play. The spat with Cloud9 originated from an incident that took place in June, during which the LCS became aware of the fact that Cloud9 had in actual fact issued actual equity to a total of 7 players.

It all reached the surface when the LCS got whiff of the fact that some of the contract extensions entered into by players connected to Cloud9 had not been properly submitted. It all got off to a particularly bad start when Cloud9 submitted a total of 10 extended contracts to the league on June 24. The contracts included supporting documents, summary sheets and various other written amendments. What had also been included in the batch submitted to the league were documents forwarded under the label of grants for “Restricted Stock Units”, or RSUs.

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RSUs Raised Suspicions

The LCS then proceeded to flag the submitted Cloud9 RSUs for an internal audit. This all happened during mid-August, with the internal investigation and audit eventually escalated to priority status in October. This also happened to be around the time following the return of Cloud9 from the League of Legends World Championship event (Worlds) Europe.

What the investigation on the part of the LCS revealed was that some of Cloud9’s players had applied to be issued with RSUs and others had been gifted RSUs. The players involved received a general pardon due to the investigation having revealed that players believed that owning equity was completely above board because of the very fact that they had been offered equity. No purposeful foul play was proven to have been present on the parts of the players themselves.

Leaning On Ignorance

Cloud9 apparently claimed that it had not been made aware of the 2017 rule change, a claim dismissed by the league as being a situation of ignorance where one hand did not know what the other hand was getting up to.

The eventual decision on the part of the LCS was that Cloud9 be slapped with a fine of between $330,000 and $605,000 in total. Quite the price to be paying for ignorance. Cloud9 has not issued any formal press release on the issue as of yet.

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