Service Centers
SEC settles with Esmark, Bouchard over 'false' $7.8B offer for USS
Written by Ethan Bernard & Michael Cowden
September 6, 2024
The US Securities and Exchange Commission (SEC) has settled charges against Esmark and company founder, chairman, and former CEO James P. Bouchard regarding an offer to buy U.S. Steel.
Recall that the Sewickley, Pa.-based service center on Aug. 14 2023, proposed buying all outstanding shares of the Pittsburgh-based steelmaker for $35 each, or $7.8 billion.
“The following day, Bouchard appeared on a cable news program and said that Esmark had $10 billion available in cash committed to the deal and would not put up any of Esmark’s assets as collateral,” the SEC said in a statement on Friday.
Esmark didn’t have the cash to make the deal. And its public statements were therefore false, the SEC said.
“Bouchard and Esmark could not have completed the tender offer for U.S. Steel that they announced,” Antonia M. Apps, director of the SEC’s New York regional office, said in the statement.
“Investors should be able to trust companies’ and executives’ public statements,” she added.
The SEC found that Esmark and Bouchard violated Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-8 thereunder.
Esmark and Bouchard, without admitting or denying the SEC’s findings, agreed to cease and desist from future violations. They also agreed to pay civil penalties of $500,000 and $100,000, respectively.
Recall that Bouchard at the time of the proposed acquisition was chairman and CEO of Esmark. He stepped down from the CEO role last November but continues on as chairman.
A request for comment from Esmark was not returned by time of publication.
Ethan Bernard
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