Lyft stock is falling Monday after the Securities and Exchange Commission said that the ride-hailing company will pay a $10 million penalty after it did not disclose a large stock transaction prior to its initial public offering.
Lyft failed to disclose in its 2019 10-K an investor’s sale of about 7.7 million shares for about $424 million in cash, according to the SEC. The transaction involved a Lyft board director at the time, who orchestrated the deal with a shareholder through a special purpose vehicle , set up by an investment advisor.
Newsletter Sign-up The agency’s statement didn’t name the alleged participants, and Lyft didn’t admit or deny the charges in agreeing to pay the settlement. “Lyft violated Section 13 of the Exchange Act and Rule 13a-1 thereunder, which require every issuer of a security registered pursuant to Section 12 of the Exchange Act to file with the Commission accurate information, documents, and annual reports as the Commission may require,” the SEC statement said.Lyft stock is 3.3% lower to $10.91 in Monday trading, which has pushed the year-to-date loss to 1.3%.