Defendant Name:
Lions Gate Entertainment Corp.
Defendant Type:
Public Company
Document Reference:
2014-51
Document Details
Legal Case Name
In the Matter of Lions Gate Entertainment Corp.
Document Name
SEC Charges Lions Gate With Disclosure Failures While Preventing Hostile Takeover; Company Admits Wrongdoing to Settle SEC Charges
Document Date
13-Mar-2014
Document Format
Administrative Proceeding
Allegation Type
Issuer Reporting and Disclosure
Document Summary
On March 13, 2014, the SEC announced that it charged motion picture company Lions Gate Entertainment Corp. ("Lions Gate") with failing to fully and accurately disclose to investors a key aspect of its effort to thwart a hostile takeover bid. According to the SEC's order instituting settled administrative proceedings, Lions Gate's management participated in a set of extraordinary corporate transactions in 2010 that put millions of newly issued company shares in the hands of a management-friendly director, a purpose of which was to defeat a hostile tender offer by a large shareholder. Lions Gate failed to reveal that the move was part of a defensive strategy to solidify incumbent management's control. Rather, the company stated in SEC filings that the transactions were part of a previously announced plan to reduce debt when, in fact, Lions Gate had made no such prior announcement. Lions Gate agreed to pay $7.5 million and admit wrongdoing to settle the SEC's charges.
