The U.S. Securities & Exchange Commission (SEC) issued its findings on Monday related to false financial reporting by Carlos Ghosn, Greg Kelly and Nissan and will impose fines on all three, but will not move forward with any criminal charges.
Under the terms of the settlement, the defendants of Nissan, Ghosn and Kelly are not “admitting or denying the SEC’s allegations.” The SEC is fining Nissan $15 million USD, Carlos Ghosn $1 million USD and Greg Kelly $100,000 USD to settle the charges.
The SEC alleged that Nissan and former CEO Carlos Ghosn filed false financial reports and “engaged in a scheme to conceal more than $90 million of compensation from public disclosure, while also taking steps to increase [his] retirement allowance by more than $50 million.” Ghosn and Greg Kelly also failed to publicly disclose $140 million of retirement compensation for Ghosn.
Ghosn has been in jail in a Tokyo prison since November 2018 and while the ruling by the SEC is a step forward, it isn’t the end of his legal troubles since Japanese authorities still want to file charges against him related to three areas: (1) that he abused corporate trust, (2) that he failed to report $80 million of income and (3) that he had Nissan take on one of his personal debts.
Ghosn’s legal team said in a email statement about the SEC’s ruling that, “We are pleased to have resolved this matter in the U.S. with no findings or admission of wrongdoing.” Ghosn’s lawyers added that Ghosn will “continue to contest and deny” the charges against him in Japan and he believes he will be exonerated when his case goes to trial.
Ghosn was originally arrested in November 2018, was held in solitary confinement, given bail by the court and then rearrested. In total he has been arrested four times but is currently out on bail while awaiting trial in Tokyo.
Many have viewed the arrest of Ghosn as a “coup de tat” by Nissan executives and earlier this month, Nissan Motor CEO Hiroto Saikawa was forced to resign after an internal investigation revealed falsified documents that boosted Saikawa’s compensation in 2013 by more than $900,000 USD.
These are essentially the same charges that were filed against Ghosn, but in a remarkable display of hypocrisy and double standards, Tokyo prosecutors have not filed any charges against Saikawa.
With the arrest in November 2018 of Ghosn and Kelly and the resignation of Saikawa earlier this month, Nissan continues to struggle against negative PR and a public perception that the automakers problems mean its automobiles are unreliable. As a result, Nissan’s sales and profits have dropped significantly and the company announced in July that it intends to cut 12,500 jobs.