SEC Charges Esmark Inc. and Chairman James Bouchard with Announcing False Tender Offer to Purchase U.S. Steel Corp.
Washington D.C. (USPress.News) The Securities and Exchange Commission announced settled charges against Esmark Inc. and its founder, chairman, and former CEO, James P. Bouchard, for publicly announcing a tender offer to purchase U.S. Steel Corporation for $35 per share even though Esmark lacked the financial means to consummate the offer.
According to the SEC’s order, on Aug. 14, 2023, at Bouchard’s direction and approval, Esmark Inc. announced an offer for all issued and outstanding shares of U.S. Steel for $35 per share, which would have required $7.8 billion in cash to complete. 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 order finds that these statements were false because Esmark did not have the $7.8 billion in cash required to complete the purchase of U.S. Steel, and, therefore, Esmark and Bouchard did not have a reasonable belief that they would have the means to purchase the securities needed to complete the announced tender offer for U.S. Steel.
“Bouchard and Esmark could not have completed the tender offer for U.S. Steel that they announced,” said Antonia M. Apps, Director of the New York Regional Office. “Investors should be able to trust companies’ and executives’ public statements.”
The SEC’s order finds that Esmark and Bouchard violated Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-8 thereunder. Without admitting or denying the SEC’s findings, Esmark and Bouchard agreed to cease and desist from committing or causing any future violations of these provisions and to pay civil penalties of $500,000 and $100,000, respectively.
Alicia Guo, Lindsay S. Moilanen, and George D. O’Kane conducted the SEC investigation, which was supervised by Thomas P. Smith, Jr. of the New York Regional Office.
