Billionaire activist investor Carl Icahn waits for Donald Trump, chairman and CEO of Trump Organization and 2016 Republican presidential nominee, not pictured, to speak at an election night event in New York, U.S., Tuesday, April 19, 2016.
Victor J. Blue | Bloomberg | Getty Images
The Securities and Exchange Commission has charged billionaire activist investor Carl Icahn with illegally failing to disclose billions of dollars in personal margin loans pledged against the value of his stock. ICAN Foundation stock.
Icahn and the publicly traded company that bears his name have agreed to pay $500,000 and $1.5 million, respectively, to settle the charges, the Securities and Exchange Commission said in a news release on Monday.
The SEC said Icahn pledged to give away between 51% and 82% of Icahn Enterprises, or IELP, outstanding shares to secure billions of dollars in margin loans without disclosing it to shareholders or federal regulators.
As the de facto controlling shareholder of IELP, Icahn was expected to file what are known as Schedule 13D filings, which typically detail what a controlling shareholder expects to do with his influence over the company, but he also had to include information about any encumbrances, such as margin loans, on the stake.
“The federal securities laws imposed separate disclosure obligations on both Icahn and IEP. These disclosures would have revealed that Icahn had committed to purchase more than half of IEP’s outstanding shares at any given time,” said Usman Nawaz, a senior SEC official.
A representative for Icahn did not immediately respond to a request for comment.
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