Lyft Inc (NASDAQ:LYFT) has agreed to pay a $10 million civil penalty for failing to disclose a board director’s interest in a transaction involving the ride-sharing company, the Securities and Exchange Commission (SEC) said.
According to the SEC, prior to Lyft’s initial public offering (IPO) in March 2019, the Lyft board director arranged for the sale of about $424 million in private shares through a special purpose vehicle associated with the director.
Lyft failed to disclose this information regarding the sale in its Form 10-K for 2019, the regulator said.
“The federal securities laws required Lyft to disclose that a director profited from a transaction in which Lyft itself was a participant,” Sheldon Pollock, Associate Regional Director of the SEC’s New York Regional Office, said in a statement.
“We remain vigilant in ensuring investors are not deprived of critical information about transactions occurring close to a company’s initial public offering.”
Without admitting or denying the SEC’s findings, Lyft agreed to a cease-and-desist order and to pay the $10 million civil penalty.
Lyft’s shares fell on the news, down 2.7% at US$10.98 in early trade Monday.
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