The SEC said on Monday that a Lyft director arranged for the sale of 2.6% of Lyft just before the firm’s IPO, and failed to disclose the financial interest the director had in that sale. Three people with direct knowledge of the matter confirmed that the director was Jonathan Christodoro, and that the sale was ultimately between the two billionaires.

Christodoro arranged for Icahn — who as an investor in Lyft had placed Christodoro on the board — to sell $424 million worth of private shares he owned in the ride-share giant, according to the people. This was a discount to the anticipated IPO price, the SEC said.

The SEC didn’t disclose the identities of Icahn, Soros or Christodoro in its release, and none of them was accused of wrongdoing in the statement. The people who identified the trio requested they not be named discussing confidential information.

Disclosure Failure

The regulator said that the San Francisco-based ride-sharing firm, which didn’t admit or deny the allegations in settling the case, failed to properly disclose the director’s financial interest in the transaction. Christodoro, who allegedly received both management fees and performance fees for the deal, resigned from the board at the time of the transaction in March 2019, according to a securities filing at the time.

A representative for Lyft didn’t respond to a request for comment. Andrew Michaelson, a lawyer for Christodoro, declined to comment. Representatives for Icahn and Soros didn’t reply to requests for comment. 

Ahead of Lyft’s IPO in late March 2019, a shareholder declined to sign the lock-up that would’ve restricted the person from selling Lyft shares for 180 days following the offering, the SEC alleged. That unidentified shareholder was Icahn, said the people familiar with the matter.

The seller owned about 2.6% of Lyft, the SEC said. 

Christodoro reached out to an investor to whom the shareholder would sell the shares. The people familiar identified that party as Soros. Christodoro then allegedly helped construct a transaction where 7.7 million shares of Lyft were sold, which the Lyft board approved. 

The shares were sold to a special-purpose vehicle set up by a firm affiliated with Christodoro, and then Soros secured the shares by becoming a partner in the special-purpose vehicle, according to the people and the SEC’s order.

The SEC had been looking into the transaction since at least 2020, two of the people familar with the deal said. 

The director identified as Christodoro didn’t disclose his material interest in the transaction to Lyft and received millions of dollars for his role in arranging the deal, the SEC said. Soros sold his Lyft stake in the third quarter of 2019, according to securities filings.