Nis­san pay­ing $15M, Ghosn $1M to set­tle SEC fraud charges

The Morning Call - - BUSINESS CYCLE - By Marcy Gordon

WASH­ING­TON — Nis­san will pay $15 mil­lion and for­mer chair­man Car­los Ghosn will pay $1 mil­lion to set­tle al­le­ga­tions by U.S. reg­u­la­tors that they hid more than $140 mil­lion of Ghosn’s re­tire­ment ben­e­fits from in­vestors.

The Se­cu­ri­ties and Ex­change Com­mis­sion an­nounced Mon­day the set­tle­ment of civil fraud charges with the ma­jor Ja­panese au­tomaker and its for­mer chair­man, who also will be barred for 10 years from serv­ing as an of­fi­cer or di­rec­tor of a pub­lic com­pany. Ghosn, 65, is await­ing trial in Ja­pan on fi­nan­cial mis­con­duct charges in a crim­i­nal case.

Ghosn, who led Nis­san for two decades, was ar­rested by Ja­panese au­thor­i­ties in Tokyo and jailed four times since Novem­ber. He has main­tained that he is in­no­cent.

He is cur­rently out on bail but faces re­stric­tions on his ac­tiv­i­ties such as not be­ing al­lowed to contact his wife, Ca­role Ghosn.

She has ap­peared be­fore a Ja­panese judge to answer ques­tions in the case. The first hear­ing in the trial has been set for April.

Ghosn and Nis­san Mo­tor Co. set­tled the charges with­out ad­mit­ting or deny­ing the SEC’s al­le­ga­tions, but agreed to re­frain from fu­ture anti-fraud vi­o­la­tions.

In ad­di­tion, a for­mer Nis­san di­rec­tor, Greg Kelly, agreed to pay a $100,000 penalty to set­tle the SEC charges, to be barred for five years from serv­ing as an of­fi­cer or di­rec­tor of a pub­lic com­pany, and to be sus­pended for five years from prac­tic­ing as an at­tor­ney be­fore the SEC.

In a state­ment, Ghosn’s team of lawyers noted that he will be al­lowed to con­test and deny the al­le­ga­tions in the crim­i­nal case in Ja­pan, and they said he “fully in­tends to do so.”

“Mr. Ghosn and his de­fense team are now able to fo­cus their ef­forts on con­tin­u­ing to vig­or­ously fight the crim­i­nal case in Ja­pan and pur­sue his claims against Nis­san around the world,” the state­ment said.

In a state­ment is­sued in Ja­pan, Nis­san noted that it had co­op­er­ated with the SEC’s in­ves­ti­ga­tion. It said it has taken ac­tions to pre­vent prob­lems from re­cur­ring, in­clud­ing set­ting up a new gov­er­nance struc­ture.

An at­tor­ney for Kelly wasn’t im­me­di­ately avail­able for com­ment. Start­ing in 2009, Ghosn, with the help of Kelly and sub­or­di­nates at Nis­san, con­ducted a scheme to con­ceal more than $90 mil­lion of his com­pen­sa­tion from in­vestors and pub­lic dis­clo­sure, while also act­ing to in­crease his re­tire­ment ben­e­fits by over $50 mil­lion, the SEC al­leged.

“Sim­ply put, Nis­san’s dis­clo­sures about Ghosn’s com­pen­sa­tion were false,” Steven Peikin, co-di­rec­tor of the SEC’s en­force­ment divi­sion, said.


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