The Securities and Exchange Commission on Monday said it fined billionaire activist investor Carl Icahn and his company $2 million, settling allegations that he failed to disclose billions of dollars worth of personal margin loans pledged against the value of his Icahn Enterprises stock.<\/p>\n
Icahn and the publicly-traded company that bears his name settled those charges without admitting or denying wrongdoing. They agreed to pay $500,000 and $1.5 million in fines, respectively, the SEC said in a press release Monday.<\/p>\n
The SEC said that Icahn, who established himself as a ruthless corporate raider before adopting the friendlier mantle of activist investor, pledged anywhere from 51% to 82% of Icahn Enterprises, or IELP, shares outstanding to secure billions worth in margin loans without disclosing that fact to shareholders or federal regulators.<\/p>\n
Icahn\u2019s cumulative personal borrowing was as much as $5 billion, according to an SEC consent order.<\/p>\n
As the effective controlling shareholder of IEP, Icahn would have been expected to make what are known as Schedule 13D filings, which typically detail what a controlling shareholder expects to do with their influence over a company. They also would have had to include information about any encumbrances, like margin loans, on a stake.<\/p>\n
\u201cThe federal securities laws imposed independent disclosure obligations on both Icahn and IEP,\u201d Osman Nawaz, a senior SEC official, said. \u201cThese disclosures would have revealed that Icahn pledged over half of IEP\u2019s outstanding shares at any given time.\u201d<\/p>\n
Icahn\u2019s margin borrowing was highlighted in a May 2023 report issued by short-seller Hindenburg Research, which put pressure on Icahn Enterprises\u2019 stock after alleging that the holding company was, among other things, not estimating the value of its holdings correctly.<\/p>\n
Icahn amended, consolidated and disclosed his margin borrowings in July, according to the SEC\u2019s consent order, two months after the Hindenburg report.<\/p>\n
\u201cThe government investigation that followed has resulted in this settlement which makes no claim IEP or I inflated NAV or engaged in a \u2018Ponzi-like\u2019 structure,\u201d Icahn said in a statement to CNBC. \u201cWe are glad to put this matter behind us and will continue to focus on operating the business for the benefit of unit holders.\u201d<\/p>\n
Hindenburg Research wrote on X on Monday that IEP is \u201cstill operating a ponzi-like structure\u201d and reiterated that it remains short the stock.<\/p>\n<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
The Securities and Exchange Commission on Monday said it fined billionaire activist investor Carl Icahn and his company $2 million, settling allegations that he failed to disclose billions of dollars worth of personal margin loans pledged against the value of his Icahn Enterprises stock. Icahn and the publicly-traded company that bears his name settled those charges without admitting or <\/p>\n","protected":false},"author":1,"featured_media":6640,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-6639","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/posts\/6639","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/comments?post=6639"}],"version-history":[{"count":0,"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/posts\/6639\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/media\/6640"}],"wp:attachment":[{"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/media?parent=6639"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/categories?post=6639"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/digitaltradecenter.com\/index.php\/wp-json\/wp\/v2\/tags?post=6639"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}