Nissan and Carlos Ghosn will settle with the Securities and Exchange Commission (SEC) following an investigation into underreporting compensations.
The New York Times reports that the SEC opened an inquiry in January in response to charges leveled against Ghosn in Japan that he conspired with former Nissan director Greg Kelly to conceal a retirement payout.
In its investigation, the SEC discovered that Ghosn, Kelly and execs had concealed more than $90 million in future payouts to the company’s former chief executive and had taken steps to increase his retirement compensation by more than $50 million.
The SEC says that, after the Japanese government passed a policy in 2009 requiring the disclosure of individual director compensation above 100 million yen (around $1 million at the time), “subordinates took steps to conceal from public disclosure a substantial portion of Ghosn’s compensation.” They did this by fraudulently inflating his pension allowance by more than $50 million and created a “false disclosure” to disguise the increase.
Neither Ghosn nor Kelly have admitted nor denied any wrongdoing.
Under the terms of the deal, Nissan will pay a $15 million fine to settle civil fraud charges while Ghosn himself will pay a $1 million penalty and Greg Kelly has agreed to pay a $100,000 fine. Ghosn’s settlement also bars him from serving as a corporate executive for 10 years.
“Simply put, Nissan’s disclosures about Ghosn’s compensation were false,” SEC co-director of enforcement Steven Peikin said. “Through these disclosures, Nissan advanced Ghosn and Kelly’s deceptions and misled investors.”
Ghosn’s lawyers say the settlement allows it to focus on his upcoming criminal trial in Japan that is expected to start in April 2020.