Carl Icahn’s Icahn Enterprises (IEP) stock fell on Wednesday after the company disclosed in an SEC filing that it was under investigation by federal prosecutors.
The U.S. Attorney’s Office for the Southern District of New York contacted Icahn the day after Hindenburg Research published a short sale report accusing Icahn Enterprises of a “Ponzi-like” structure.
Federal prosecutors have requested information on dividends and corporate governance, among other topics, according to an SEC filing released Wednesday.
Shares of Icahn Enterprise closed 15.1% on Wednesday in response to the news and are now down about 40% since the report.
Icahn and its “affiliates” own approximately 84% of Icahn Enterprises, according to a statement. The fall in IEP shares sent Icahn’s net worth down nearly 40%, according to Bloomberg’s Billionaires Index.
Hindenburg pointed to IEP’s 15.8% dividend yield, which he said is the highest of any large-cap U.S. name. Hindenburg argued that achieving this return is not done through legal means and Icahn is “putting on too much weight.”
Icahn has not spoken publicly since the charges outside of prepared statements. Icahn released an updated statement on Wednesday.
“Hindenburg Research, founded by Nathan Anderson, would be more aptly named Blitzkrieg Research given its tactics of wanton destruction of property and harming innocent civilians,” Icahn said in the statement. “Mr. Anderson’s modus operandi is to launch disinformation campaigns to misrepresent corporations.” images, damage their reputation and bleed the hard-earned savings of individual investors. But, unlike many of his victims, we will not sit idly by. We intend to take all appropriate measures to protect our unitholders and to fight back.”
In Wednesday’s filing, IEP said it was cooperating and providing documents to federal prosecutors.
“The U.S. Attorney’s Office has made no claims or allegations against us or Mr. Icahn with respect to the foregoing investigation,” the filing said. “We believe we maintain a robust compliance program and, while no assurances can be given and we are still evaluating the matter, we do not currently believe that this investigation will have a material impact on our business, financial condition, our results of operations or our cash flows.”
Josh is a reporter for Yahoo Finance.
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