SEC fines Carl Icahn £1.6 million for loan disclosure failures
The U.S. Securities and Exchange Commission (SEC) has fined well-known investor Carl Icahn and his company due to irregularities in disclosing information about loans secured by shares. The total fine amounts to £1.6 million. Hindenburg Research revealed the irregularities.
According to SEC findings, Carl Icahn, a well-known billionaire and investor, did not properly disclose information about significant personal loans. These obligations were secured by shares of his own company, Icahn Enterprises (IEP). The Commission claims that the value of these hidden loans reached as much as £4 billion.
Detailed SEC investigation revealed that Icahn pledged between 51% to 82% of IEP's shares as collateral for his loans. Such a significant burden on shares should have been reported in the appropriate regulatory documents, which Icahn did not do.
Osman Nawaz, a senior SEC official, emphasised that the obligation to disclose this information rested with both Icahn and his company - explained CNBC.
Market reactions
As a result of the settlement with the SEC, Carl Icahn agreed to pay a penalty of £400,000, while his company, Icahn Enterprises, was fined £1.2 million. Although both the billionaire and his company did not admit guilt, they agreed to pay the fines. It is worth noting that this issue came to light after a report by Hindenburg Research was published in May 2023.
The market reaction to this information was immediate. Icahn Enterprises (IEP) shares fell by 6 percent on the day the SEC decision was announced. Carl Icahn himself issued a statement saying, "We are pleased to put this matter behind us and focus on conducting business for the benefit of shareholders."
Hindenburg research criticises icahn
The research and investment firm Hindenburg Research took a stance on the businessman. In May of last year, they revealed irregularities in the disclosure of loans provided by Icahn's company.
Researchers say Icahn Enterprises "operates in a structure similar to a Ponzi scheme." Hindenburg Research also emphasises that the billionaire's company lost nearly £800 million just in the last quarter.
