Billionaire Carl Icahn to pay $2M penalty to settle US charges

By Ovunc Kutlu

ISTANBUL (AA) - American billionaire Carl Icahn and his company agreed to pay a total of $2 million in penalties to settle charges, the US Securities and Exchange Commission (SEC) said Monday.

The charges are related to failing to disclose information relating to Icahn’s pledges of his publicly traded company Icahn Enterprises (IEP) securities as collateral to secure personal margin loans worth billions of dollars under agreements with various lenders, the agency said in a statement.

Icahn, who is IEP’s controlling shareholder and chairman, pledged approximately 51%-82% of IEP's outstanding securities as collateral to secure personal margin loans worth billions of dollars under agreements with various lenders, it added.

"The federal securities laws imposed independent disclosure obligations on both Icahn and IEP. These disclosures would have revealed that Icahn pledged over half of IEP’s outstanding shares at any given time," said Osman Nawaz, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit.

"Due to both disclosure failures, existing and prospective investors were deprived of required information."

Shares of IEP were down 6.3% on the Nasdaq at 10.31 a.m. EDT (1431GMT).

IEP and Icahn agreed to pay $1.5 million and $500,000 in civil penalties, respectively, to settle the SEC's charges, according to the statement.