Lions Gate To Pay $7.5 Mln To Settle SEC Charges Related Icahn Bid

(RTTNews) - The Securities and Exchange Commission Thursday charged motion picture company Lions Gate Entertainment Corp. (LGF) with failing to fully and accurately disclose to investors a key aspect of its effort to thwart a hostile takeover bid. The company agreed to pay $7.5 million and admit wrongdoing to settle the SEC's charges.

The SEC said Lions Gate's management participated in some extraordinary corporate transactions in 2010 that put millions of newly issued company shares in the hands of a management-friendly director.

A purpose of this move was to defeat a hostile tender offer by a large shareholder - Carl Icahn - who had been locked in a battle for control of the company for at least a year.

However, Lions Gate did not reveal that the move was part of a defensive strategy to strengthen incumbent management's control. Instead, it said in SEC filings that the transactions were part of a previously announced plan to reduce debt.

The large shareholder had made several tender offers and acquired more than 37 percent of Lions Gate's outstanding stock.

LGF dropped 3.2 percent on Thursday to close at $32.20.