Icahn will pay a total of $2 million to settle the charges.
Transcript:
Conway Gittens: Here’s what we’re watching on TheStreet today.
The trading day begins with the S&P 500 and the Nasdaq looking for their next move following eight-days of gains. Stocks are not the only thing on the up and up. Gold prices are at a record high – trading above $2500 an ounce. And for the first time in history, a gold bar, which typically weighs about 400 ounces, is worth $1 million.
And speaking of millions…Veteran Wall Street tycoon Carl Icahn has agreed to pay $1.5 million to settle charges that he used his company’s stock as collateral for billions of dollars in personal loans – without telling investors. He and his company, Icahn Enterprises, also agreed to pay half-a-million dollars in civil penalties.
According to the Securities and Exchange Commission, the misdeeds, which go all the way back to 2005, are tied to the fact that he did not reveal what he was doing to all his shareholders. “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. Due to both disclosure failures, existing and prospective investors were deprived of required information.”
If those billions of dollars in personal loans would have gone bad, then lenders would have confiscated Icahn Enterprise shares, which would have forced a sale that would’ve hurt all company shareholders – all without shareholder knowledge.
Icahn is a Wall Street legend and is said to have partially inspired the Gordon Gekko villain made famous in the 1987 hit movie “Wall Street.”
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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