Movie studio Lions Gate Entertainment has agreed to pay a $7.5 million fine to settle charges by the Securities and Exchange Commission that it failed to fully and accurately disclose to investors a key aspect of its effort to thwart a hostile takeover bid by activist investor Carl Icahn. As part of the settlement, the company agreed to admit wrongdoing.
According to the SEC, Lions Gate’s management participated in a set of “extraordinary corporate transactions” in 2010—authorized during a midnight meeting of directors—that put millions of newly issued company shares in the hands of a management-friendly director. The maneuver was intended to defeat Icahn’s hostile tender offer.
