TheCorporateCounsel.net

Yesterday, the SEC announced settled enforcement proceedings against Carl Icahn and Icahn Enterprises arising out of alleged failures to comply with disclosure requirements in Schedule 13D and Form 10-K applicable to pledging arrangements.  Here’s an excerpt from the SEC’s press release:

According to the SEC’s orders, from at least December 31, 2018, through the present, Icahn, who is IEP’s controlling shareholder and Chairman of the board of directors of IEP’s general partner, pledged approximately 51 to 82 percent of IEP’s outstanding securities as collateral to secure personal margin loans worth billions of dollars under agreements with various lenders.

Notwithstanding Icahn’s various margin loan agreements and amendments, IEP failed to disclose Icahn’s pledges of IEP securities as required in its Form 10K until February 25, 2022. Icahn also failed to file amendments to Schedule 13D describing his personal margin loan agreements and amendments, which dated back to at least 2005, and failed to attach required guaranty agreements. Icahn’s failure to file the required amendments to Schedule 13D persisted until at least July 9, 2023.

Without admitting or denying the SEC’s findings, Icahn consented to an order to cease and desist from future violations of Section 13(d)(2) of the Exchange Act and Rule 13d-2(a) thereunder. He also agreed to pay a $500,000 civil money penalty. Icahn Enterprises also consented, on a neither admit nor deny basis, to an order to cease and desist from future violations of Section 13(a) of the Exchange Act and Rule 13a-1 thereunder. The company also agreed to pay a $1.5 million civil money penalty.

Since this involves Carl Icahn, the SEC’s enforcement action has already garnered quite a bit of media attention.  If you’re interested in more background on the SEC’s investigation, check out this Reuters’ article.

– John Jenkins