Lyft will pay $10 million to the SEC after a board member was paid to arrange a $424 million share sale between his former boss, Carl Icahn, and George Soros.
The ride-share company has agreed to pay a $10 million fine to resolve Securities and Exchange Commission civil charges that it failed to disclose that one of its former board members was paid to arrange a pre-IPO share sale between billionaires Carl Icahn and George Soros.
Initially, Lyft’s board rejected a big investor’s effort to sell a stake in the company, citing possible insider-trading issues due to the investor’s knowledge of details of the IPO, the SEC said. Prior SEC filings show that the investor in question is Icahn. The transaction amounted to $424 million, or around $55 per share, the SEC said. Lyft LYFT, -3.43% later went public at $72 per share. Christodoro stepped down from Lyft’s board shortly before the company went public.For his role in arranging the transaction, Christodoro was slated to be paid $9.2 million in fees, although that figure was later negotiated down to a lower seven-digit figure, the SEC said.
“The federal securities laws required Lyft to disclose that a director profited from a transaction in which Lyft itself was a participant,” said Sheldon Pollock, of the SEC’s New York office. “We remain vigilant in ensuring investors are not deprived of critical information about transactions occurring close to a company’s initial public offering.”
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