Billionaire Carl Icahn and his company were charged by U.S. regulators with failing to disclose personal loans worth billions of dollars obtained using the securities of Icahn Enterprises as collateral.
Icahn Enterprises and Icahn have agreed to pay $1.5 million and $500,000 respectively in civil penalties to settle the charges, the Securities and Exchange Commission said Monday.
The agency says that from at least Dec. 31, 2018 to the present, Icahn pledged approximately 51% to 82% of Icahn Enterprises’ outstanding securities as collateral to secure personal loans with a number of lenders.
The SEC says Icahn Enterprises failed to disclose Icahn’s pledges of the company’s securities as required in its annual report until Feb. 25, 2022. Icahn also failed to file amendments to a required regulatory filing describing his personal loan agreements and amendments, which date back to at least 2005, and failed to attach required guaranty agreements. Icahn’s failure to file the required amendments to the regulatory filing persisted until at least July 9, 2023, the agency adds.
Icahn became widely known as a corporate raider in the 1980s when he engineered a takeover of TWA, or Trans World Airlines. Icahn bought the airline in 1985 but by 1992 it filed for bankruptcy. TWA emerged from bankruptcy a year later but continued to operate at a loss and its assets were sold to American Airlines in 2001. In February, Icahn took a nearly 10% stake in JetBlue.
Icahn Enterprises and Icahn, without admitting or denying the findings, have agreed to cease and desist from future violations and to pay the civil penalties.
