Daily Management Review

SEC Settles Charges Of Under Reporting Of Pay With Former Nissan CEO Carlos Ghosh


SEC Settles Charges Of Under Reporting Of Pay With Former Nissan CEO Carlos Ghosh
Charges against the embattled former chairman and CEO of Japanese auto giant Nissan Carlos Ghosn and former director Gregory Kelly brought in by the United States Securities and Exchange Commission were settled. The charges against the two former executives were related to false financial disclosures and the false reporting by the duo had allegedly resulted in underreporting of more than $140 million in total compensation.
According to the SEC, starting from 2009 till he was arrested in November of 2018 in Tokyo, Ghosn had allegedly underreported more than $90 million of his pay from Nissan and he was aided significantly by Kelly and others. Increasing Ghosn’s pension by more than $50 million was also included in the scheme.
More than $140 million in undisclosed compensation retirement benefits were omitted by Nissan in its financial disclosures, said the SEC. the commission said that the company however never paid that sum to Ghosn.
The SEC said in a statement that Ghosn and Kelly “crafted various ways to structure payment of the undisclosed compensation after Ghosn’s retirement, such as entering into secret contracts, backdating letters to grant Ghosn interests in Nissan’s Long Term Incentive Plan, and changing the calculation of Ghosn’s pension allowance to provide more than $50 million in additional benefits.”
Nissan was also charged by the SEC of violation of anti-fraud provisions which the company had agreed to settle through a payment of a penalty of $15 million. Accusations against Ghosn of violation of securities laws and Kelly of helping in the violations were brought in by the SEC.
While agreeing to a civil settlement with the SEC, Ghosn agreed to pay a civil penalty of $1 million and agreed not be assume a post of an officer or director of a public company for a period of 10 years. On the other hand, a settlement with Kelly comprised of the executive agreeing to a $100,000 penalty, a bar as an officer and director for a period of 5 years and would not be allowed to appear as an attorney for five years as an attorney before the commission.
“Simply put, Nissan’s disclosures about Ghosn’s compensation were false,” said Steven Peikin, co-director of the SEC’s division of enforcement. “Through these disclosures, Nissan advanced Ghosn and Kelly’s deceptions and misled investors, including U.S. investors.”
The SEC said that while making the settlement, neither Ghosn nor Kelly admitted or denied the allegations and findings.
“We are pleased to have resolved this matter in the U.S. with no findings or admission of wrongdoing,” said the defense team of the former CEO’ in a statement,
Alongside the ongoing Japanese criminal proceedings, a parallel investigation was also carried out by the SEC, the lawyers of Ghosn also added. “The SEC settlement expressly permits Mr. Ghosn to continue to contest and deny the factual and legal allegations against him in the criminal proceedings in Japan, and Mr. Ghosn fully intends to do so,” they said.
Ghosn and his team “remain confident that, if given a fair trial, he will be acquitted of all charges and fully vindicated.”

Science & Technology

Apple to come up with AR glasses

WEF: Big data regulation becomes a problem

Israeli Firm Accused Of Spying By WhatsApp, Lawsuit Filed Against It

Google Used Quantum Computer To Solve Complex Problem

Mars Had Earth-like Salt Lakes

Study: AI is not as profitable as you might think

Porsche, Boeing set to develop flying electric car

Samsung to invest $ 11 billion in new generation displays

US is betting on Nokia and Ericsson to replace Huawei

UPS becomes first to receive full regulatory approval for UAV shipping in USA

World Politics

World & Politics

Vale hiding information about problems at Brazilian dams could result in death of 270 people

US Lawmakers Introduce Bill About Xinjiang Uygur Camps In China

European Council agrees to extend Brexit again

Pressure From China Forces Maserati To Dissociate From Film Awards Event In Taiwan

China to replace Hong Kong's Carrie Lam

Iran warns of new reduction in nuclear deal liabilities

Dominican Republic lost $ 200 million because of scandal with tourists death

France: We will take measures to protect our military in Syria