Nissan Under SEC Investigation After Indictments Against Ghosn

A U.S. probe is investigating Nissan for falsifying its disclosures about Ghosn’s compensation.

2019 Nissan LEAF Plus (e+)
Nissan is facing an SEC investigation after former chairman Carlos Ghosn’s arrest in November. [Photo: Nissan]

As former Nissan chairman Carlos Ghosn remains in custody awaiting trial, a new investigation into Nissan itself moves forward. The U.S. Securities and Exchange Commission is looking into whether the company made false disclosures in annual securities reports about Ghosn’s compensation. According to an Automotive┬áNews report, Nissan spokesperson Nicholas Maxfield confirmed the SEC inquiry. He went further to say the company was cooperating with U.S. authorities, but did not provide any further details.

Nissan facing charges in Japan

Nissan currently faces two charges in Japan. Both are related to violating Japan’s Instruments and Exchange Act by allegedly underreporting Ghosn’s earnings. Japanese authorities say the automaker failed to report tens of millions of dollars in compensation to Ghosn from 2010-2014 and 2015-2017.

Carlos Ghosn arrested
Nissan chairman Carlos Ghosn was arrested by Japanese authorities for alleged financial violations. [Photo: Nissan]

In November 2018, Japanese authorities arrested Ghosn on charges of underreporting his income. Since formally charging him in December, he has been in custody, and may stay in jail for months until his trial. Nissan and Mitsubishi promptly ousted Ghosn, while he formally resigned from Renault last week.

The SEC probe adds to the scrutiny that’s been surrounding Nissan in the past few months. Currently, the investigation focuses on whether Nissan’s alleged failure to accurately report Ghosn’s earnings violates U.S. securities law. Bloomberg reports the SEC delayed this investigation because of the partial U.S. government shutdown.

Carlos Ghosn arrested
Current Nissan CEO Hiroto Saikawa. [Photo: Nissan]

Current Nissan CEO Hiroto Saikawa reflected on the situation in a memo to staff last month. This sort of oversight, he said, “permitted the situation to continue, which clearly calls for grave reflection.” The company’s stocks dipped slightly in this morning’s trading, following the news of the SEC investigation.

Japanese authorities also arrested Nissan director Greg Kelly, who was allegedly involved in the misconduct. They released him on bail in December, but he must remain in Japan until trial as a condition of his release.