SEC Charges Lyft With Failure To Disclose Board Member's Financial Interest In Private Shareholder's Pre-IPO Stock Transaction
Portfolio Pulse from Benzinga Newsdesk
The Securities and Exchange Commission (SEC) has charged Lyft Inc. for failing to disclose a board director's role in a shareholder's sale of approximately $424 million worth of private shares of Lyft's stock prior to the company's IPO. The director arranged for a shareholder to sell its shares to a special purpose vehicle (SPV) set up by an investment adviser affiliated with the same director. Lyft approved the sale and secured a number of terms in the contract. Lyft failed to disclose this information in its Form 10-K for 2019. Lyft has agreed to a cease-and-desist order and to pay a $10 million civil penalty.
September 18, 2023 | 1:17 pm
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Lyft has been charged by the SEC for failing to disclose a board director's role in a pre-IPO stock transaction. The company has agreed to pay a $10 million penalty.
The SEC's charge against Lyft for failing to disclose a board director's role in a pre-IPO stock transaction is a significant regulatory issue. This could negatively impact investor confidence in the company's governance and transparency, potentially leading to a short-term decrease in the company's stock price. The $10 million penalty is also a direct financial hit to the company.
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