Lyft pays $10M civil penalty to SEC after stock sale charges

The Securities and Exchange Commission charged Lyft for failing to disclose a company board director’s role in a shareholder’s sale of approximately $424M worth of private shares of Lyft’s stock prior to the company’s initial public offering. According to the SEC’s order, prior to Lyft’s IPO in March 2019, a Lyft board director arranged for a shareholder to sell its shares to a special purpose vehicle set up by an investment adviser affiliated with the same director. Lyft failed to disclose this information regarding the sale in its Form 10-K for 2019, says the agency. The SEC’s order finds that the director left the board at the time of the transaction. Without admitting or denying the SEC’s findings, Lyft agreed to a cease-and-desist order and to pay a $10M civil penalty.