SEC charges Carl Icahn with hiding billions of dollars worth of stock pledges
The Securities and Exchange Commission on Monday said it had 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.
The Securities and Exchange Commission on Monday said it had 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 denying wrongdoing. They agreed to pay $500,000 and $1.5 million in fines, respectively, the SEC said in a press release Monday.
The SEC said that Icahn, who made a reputation 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 to shareholders or federal regulators.
Icahn’s cumulative personal borrowing was as much as $5 billion, according to an SEC consent order.
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 control shareholder expects to do with their influence over a company but also would have had to include information about any encumbrances, like margin loans, on a stake.
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