Ghosn and Company Settle With SEC -- WSJ

By Nick Kostov

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 24, 2019).

Nissan Motor Co. and its former chairman, Carlos Ghosn, have settled civil charges with the U.S. Securities and Exchange Commission stemming from an investigation into pay disclosures.

Nissan agreed to pay a $15 million civil penalty to settle charges that it and Mr. Ghosn filed false financial disclosures that omitted more than $140 million slated to be paid to Mr. Ghosn in retirement, the SEC said. In a separate settlement, Mr. Ghosn agreed to a $1 million civil penalty and a 10-year prohibition from serving as an officer or director for a company that files financial statements with the SEC. Greg Kelly, a former Nissan director, agreed to a $100,000 fine and a 5-year ban from serving as an officer or director of a company that files with the SEC.

All parties settled without admitting or denying the allegations.

"Simply put, Nissan's disclosures about Ghosn's compensation were false, " said Steven Peikin, co-director of the SEC's division of enforcement, in a statement. "Through these disclosures, Nissan advanced Ghosn and Kelly's deceptions and misled investors, including U.S. investors."

Tokyo prosecutors have charged Nissan and Mr. Ghosn with underreporting compensation over eight years worth of financial reports. Nissan hasn't disputed the charges in Japan. Mr. Ghosn has denied wrongdoing and plans to fight the charges in court. He was arrested last year, but has been released on bail and is preparing for trial. He is also suing Nissan in the Netherlands for wrongful dismissal.

"We are pleased to have resolved this matter in the U.S. with no findings or admission of wrongdoing," Mr. Ghosn's defense team said in a statement. It said the team will now focus its "efforts on continuing to vigorously fight the criminal case in Japan and pursue his claims against Nissan around the world."

On the SEC settlement, Nissan said it "provided significant cooperation to the SEC and has promptly implemented remedial acts to prevent recurrence." Nissan has expressed regret over the potential impact to shareholders.

Nissan shares don't trade on a U.S. stock exchange, but the company issues a form of American depositary receipt, which allow investors in the U.S. essentially to own Nissan shares in U.S. dollars.

Mr. Kelly, who was arrested on the same day as Mr. Ghosn, was charged by Japanese prosecutors late last year with underreporting Mr. Ghosn's compensation on Nissan's financial statements. "Mr. Kelly continues to deny vehemently and categorically all charges against him," his attorney said on Monday.

Write to Nick Kostov at Nick.Kostov@wsj.com

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September 24, 2019 02:47 ET (06:47 GMT)

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