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SEC Settles With Former Nissan CEO Carlos Ghosn Over Pay Disclosure Charges

The U.S. Securities and Exchange Commission Monday said it settled fraud charges against former Nissan CEO Carlos Ghosn and its former director Greg Kelly related to false financial disclosures that omitted more than $140 million in total retirement payment.

According to the SEC, from 2009 until his arrest in Tokyo in November 2018, Ghosn, with substantial assistance from Kelly and subordinates at Nissan, engaged in a scheme to conceal more than $90 million of compensation from public disclosure, while also taking steps to increase Ghosn's retirement allowance by more than $50 million.

Ghosn and his subordinates, including 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. The $140 million in undisclosed compensation and retirement benefits was never paid out to Ghosn.

"Investors are entitled to know how, and how much, a company compensates its top executives. Ghosn and Kelly went to great lengths to conceal this information from investors and the market," said Stephanie Avakian, Co-Director of the SEC's Division of Enforcement.

"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 charged Nissan with violating the anti-fraud provisions of the Securities Exchange Act of 1934. Nissan settled the charges, agreeing to pay a $15 million civil penalty and to cease and desist from committing or causing violations of the anti-fraud provisions.

Ghosn agreed to a $1 million civil penalty and a 10-year bar from serving as an officer or director of a public company. Kelly agreed to a $100,000 penalty, a five-year officer and director bar and a five-year suspension from appearing before the commission as an attorney.

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