Lyft has agreed to pay a $10 million fine over a U.S. Securities and Exchange Commission cost that the ride-hailing firm failed to disclose a board director’s role in the sale of $424 million value of personal shares earlier than to its preliminary public providing.
The SEC stated Monday that prior to Lyft’s IPO in March 2019, a board director organized for a shareholder to promote its shares to a to a particular objective car arrange by an funding adviser affiliated with the identical director. The SEC stated this director, who the company didn’t title, then contacted an investor in buying the shares by way of the SPV.
Lyft authorised the sale and even secured numerous phrases in the contract, in accordance to the SEC. The director acquired “millions of dollars” in compensation from the funding adviser for his role in structuring and negotiating the deal, the SEC stated. And but, Lyft by no means disclosed this data.
The SEC’s order finds that the director left the Board on the time of the transaction. Lyft agreed to the fine with out admitting or denying the SEC’s cost.
“The federal securities laws required Lyft to disclose that a director profited from a transaction in which Lyft itself was a participant,” stated Sheldon L. Pollock, Associate Regional Director of the SEC’s New York Regional Office. “We remain vigilant in ensuring investors are not deprived of critical information about transactions occurring close to a company’s initial public offering.”
Lyft didn’t instantly reply with remark.