SEC Fires at HG Vora Over Damning Disclosure Lapses!

Key Points:

• HG Vora faces regulatory heat over delayed ownership disclosures in a high-stakes Ryder System acquisition bid.
• HG’s calculated moves, undisclosed stakes, and a premium bid for Ryder revealed.

The Securities and Exchange Commission (SEC) has announced that it has reached a settlement with HG Vora Capital Management LLC, a New York-based investment adviser, over charges related to disclosure failures leading up to its acquisition bid for Ryder System Inc. in May 2022.

In a move to resolve the charges, HG Vora has agreed to pay a substantial $950,000 civil penalty.

The SEC revealed that HG failed to make timely ownership disclosures as required under federal securities laws. Companies holding more than five percent of a public company’s stock must disclose their position and whether they have a control purpose – an intention to influence or control the company.

HG Vora’s $950K Penalty Unveils Hidden Ryder Bid Dynamics!

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According to the SEC’s findings, on February 14, 2022, HG disclosed ownership of 5.6 percent of Ryder’s common stock as of December 31, 2021, without indicating a control purpose. However, by April 26, 2022, HG Vora increased its position to 9.9 percent and formed a control purpose, necessitating disclosure by May 6, 2022. The information, however, was not reported until May 13.

On the same day as the belated disclosure, HG sent a letter to Ryder proposing an acquisition at $86 per share, a significant premium over the trading price. Prior to this announcement, and after forming a control purpose, HG Vora had purchased swap agreements providing economic exposure equivalent to an additional 450,000 shares of Ryder common stock. Following the public bid, Ryder’s stock price experienced a substantial increase.

SEC’s Probe Exposes HG Vora’s Ryder Maneuvers!

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Mark Cave, Associate Director of the SEC’s Division of Enforcement, emphasized the importance of ownership disclosure laws, stating that HG Vora’s actions deprived Ryder shareholders of critical information while strategically positioning itself for profit.

The SEC’s order notes that HG Vora violated the beneficial ownership provisions of the Securities Exchange Act of 1934. As part of the settlement, HG Vora neither admits nor denies the findings but agrees to cease future violations and pay the stipulated civil penalty.