CVR settles SEC probe into disclosures tied to Icahn takeover

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By Nate Raymond | NEW YORK

NEW YORK CVR Energy Inc will not pay a
penalty over allegations that it made inadequate disclosures to
investors during its unsuccessful defense against billionaire
Carl Icahn’s 2012 hostile takeover, the U.S. Securities and
Exchange Commission said on Tuesday.

The SEC announcement came two years after CVR disclosed
regulators were examining whether it properly characterized fees
it agreed to pay advisers Goldman Sachs and Deutsche Bank to
defend against Icahn’s tender offer.

According to the SEC, the Texas-based oil refinery company
made inadequate disclosures in SEC filings about “success fee”
arrangements it reached with the two investment banks.

Investors as a result were unaware of the potential
conflicts of interest that the banks could still earn success
fees even if Icahn secured control of the company, the SEC said.

A majority of CVR shareholders ultimately accepted Icahn’s
$30-per-share tender offer. The activist investor as of
September had an 82 percent stake in the company, according to a
regulatory filing.

CVR declined to comment. It agreed to settle the case
without admitting or denying wrongdoing, and the SEC said the
company would pay no penalty in light of remedial steps it had
taken and its “extensive cooperation” with the probe.



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