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Ride-hailing app Lyft has agreed to pay a $10 million fine to the U.S. Securities and Exchange Commission to settle an investigation into disclosures related to Carl Icahn’s sale of shares in the company ahead of its 2019 initial public offering.

Wall Street regulators said Lyft failed to disclose how much money Jonathan Christodoro, who served on the company’s board until March 2019, made by arranging the sale of Icahn’s 2.6% stake in the ride-hailing group. One million U.S. dollars.

The Securities and Exchange Commission said Icahn invested $100 million in the company in 2015 and appointed Cristolo to its board of directors, who received compensation for executing the deal ahead of the ride-sharing company’s initial public offering. Millions of dollars.

According to the SEC, a Lyft director arranged for a major shareholder to sell his stake in the company to a special purpose vehicle set up by an investment adviser affiliated with the director.

The regulator did not name the board directors or shareholders, but two people familiar with the matter identified them as Christodoro and Icahn Enterprises.

The SEC and Lyft declined to comment, as did representatives for Icahn and lawyers for Cristolo.

The SEC’s action stems from regulators’ accusations that Lyft failed to disclose the fees Christodoro negotiated when Icahn sold 7.7 million Lyft shares.

According to the SEC order, Icahn had told the company that he wanted to sell half of his investment before going public. He did not sign the customary “lock-up” agreement, which prohibits him from selling stock when the company begins trading on the public stock market.

Under the order, Lyft formed a special committee to weigh the sale risks surrounding insider trading and the conflicts of interest posed by Cristoro’s board seat.

To overcome the risk, Christodolo suggested Icahn sell his entire 2.6% stake to him in a private deal before finding a third-party buyer. Lyft supports the arrangement, according to the SEC complaint.

Icahn sold his stake to the company for approximately $424 million, while Cristodoro was an employee of the company and “received a regular salary and compensation…” . . The SEC claimed it was “related to investment opportunities arising from his work.” Regulators said he “did not disclose his compensation or material interest in the transaction to Lyft.”

The SEC said Christodolo negotiated 50% of management fees and 85% of performance fees derived from millions of dollars in proceeds before and after the IPO. He was supposed to receive $9.8 million as part of the deal, but the purchasers of the shares negotiated that number down to “the low seven figures.”

Lyft went public at $72 a share, and its stock price plummeted due to heavy losses. Its stock price is currently around $10 per share, having fallen more than 80% since its 2019 offering.

Cristolo has served on several corporate boards and was involved in some of Icahn’s biggest activist campaigns in recent years. He joined Icahn’s hedge fund in 2012 and was nominated by the octogenarian billionaire activist investor to serve on the boards of companies including AIG, PayPal Holdings and Xerox.

He left Icahn’s firm in 2017 and later became chairman of a special purpose acquisition company that last year abandoned a $2.2 billion merger with fintech company Acorns, a deal that would have given the startup a Listed on the New York Stock Exchange.

Financial filings show Cristolo remains on PayPal’s board and serves as a director of dozens of mutual funds and exchange-traded funds.

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