Ex-Lyft Director Arranged Massive Pre-IPO Share Sale
Lyft Inc.’s former director, Sujay Jaswa, is facing charges from the U.S. Securities and Exchange Commission (SEC) for allegedly arranging a massive pre-IPO share sale. The SEC claims that Jaswa sold over $10 million worth of Lyft shares to family and friends before the company went public in 2019.
Background of the Allegations
Jaswa was a director at Lyft from 2013 to 2018. During his tenure, he was granted over 1.7 million shares of the company. In 2018, Lyft filed for an initial public offering (IPO). In the months leading up to the IPO, Jaswa allegedly sold over $10 million worth of Lyft shares to family and friends.
The SEC claims that Jaswa did not disclose the sales to Lyft or the SEC. He also allegedly failed to register the sales with the SEC, as required by law. The SEC further alleges that Jaswa did not inform the buyers of the shares that they were restricted securities, meaning they could not be sold until the IPO was completed.
SEC Investigation and Charges
The SEC began investigating Jaswa in 2019. After a lengthy investigation, the SEC filed charges against Jaswa in September 2023. The SEC alleges that Jaswa violated the Securities Act of 1933 by failing to register the sales of the Lyft shares and failing to disclose the sales to the SEC.
The SEC is seeking a permanent injunction against Jaswa, as well as civil penalties and disgorgement of any profits he made from the sales. The SEC is also seeking to bar Jaswa from serving as an officer or director of a public company.
Jaswa’s Response
Jaswa has denied the SEC’s allegations. He claims that he did not violate any laws and that he was unaware of the restrictions on the sale of the Lyft shares. He also claims that he did not make any profits from the sales.
Implications of the Case
The case against Jaswa is significant because it highlights the importance of compliance with securities laws. Companies and individuals must comply with the laws and regulations governing the sale of securities. Failure to do so can result in serious consequences, including civil penalties and criminal charges.
The case also serves as a reminder that pre-IPO sales must be properly registered and disclosed. Companies and individuals must ensure that all sales of securities are properly registered and disclosed to the SEC. Failure to do so can result in serious consequences.
The Future of the Case
The case against Jaswa is ongoing. It is unclear how the case will ultimately be resolved. However, the case serves as a reminder of the importance of compliance with securities laws. Companies and individuals must ensure that all sales of securities are properly registered and disclosed to the SEC. Failure to do so can result in serious consequences.