The NBA announced on Wednesday that the Los Angeles Clippers and Kawhi Leonard have been penalized for violating salary cap circumvention rules outlined in the league's Collective Bargaining Agreement with the National Basketball Players Association. The determination followed an independent investigation conducted by law firm Wachtell, Lipton, Rosen & Katz.

The investigation found a pattern of misconduct and multiple significant rules violations by the Clippers organization, which the league identified as a prior offender of salary cap circumvention rules. According to a summary report prepared by Wachtell Lipton, the Clippers violated league rules by initiating off-court income opportunities between Leonard and four companies doing business with the team: Aspiration Partners, Boingo Wireless, Daktronics and Lockton Insurance.

The report also found the Clippers facilitated endorsement agreements between those companies and Leonard, induced the companies to enter those agreements by offering them business from the team, paid personal expenses on Leonard's behalf and his representatives, and failed to report improper solicitations for off-court income opportunities made through Leonard's then-business manager, Dennis Robertson.

The NBA found that Leonard, through Robertson's conduct on his behalf, violated circumvention rules by pressuring the Clippers to help him obtain off-court income opportunities, successfully securing those opportunities, and failing to reimburse the Clippers for personal expenses paid on his behalf.

Based on the findings, the NBA imposed a series of penalties. The Clippers will forfeit five first-round draft picks, one each in the 2029, 2030, 2031, 2032 and 2033 NBA Drafts, and the team was fined $30 million.

The five first round picks is in addition to the five first rounds plus Shai Gilgeous-Alexander that the Clippers traded to the Oklahoma City Thunder in 2019 for Paul George, which was part of their efforts to sign Leonard.

Clippers owner Steve Ballmer has been suspended from all league and team activities for one year for knowingly seeking to help Leonard obtain off-court income opportunities, for approving a business deal he knew was a precondition for Aspiration to enter into an endorsement agreement with Leonard, and for failing to create conditions under which his organization complied with the NBA's circumvention rules.

Clippers President of Business Operations Gillian Zucker has been suspended without pay for one year for being primarily and directly culpable for the impermissible endorsement arrangements and for providing false and misleading statements to investigators. Clippers President of Basketball Operations Lawrence Frank has also been suspended without pay for six months for his involvement in the impermissible endorsement arrangements and for approving impermissible expenses incurred by Leonard and his family.

The Clippers organization and its personnel will also be subject to a compliance and monitoring program overseen by the league office for five years. Leonard is required to pay the league $700,000 in connection with his violations, while Robertson is banned from conducting business or otherwise engaging with NBA teams and their affiliates on behalf of any player, employee or other league or team personnel for five years.

Leonard was traded by the Clippers to the Toronto Raptors in June and that trade is now expected to be formally approved now that he won't receive a suspension from the NBA.

The NBA and NBPA have entered into an agreement confirming the penalties are final and binding on all parties. Wachtell Lipton continues to receive information relevant to the investigation, and the league said it will consider further action as appropriate.

Adam Silver addressed the findings in a statement.

"The NBA's collectively bargained system for determining player compensation is a fundamental component of the basketball competition that the league oversees for the benefit of the teams and players and ultimately the fans," said Silver. "I am deeply disappointed by the flagrant violations of our rules and by the Clippers' institutional and leadership failures that led to this misconduct. The severity of the penalties reflects the seriousness of the violations."