SEC Fines Esmark Inc. and Founder for False Tender Offer

(Reuters) – The U.S. Securities and Exchange Commission (SEC) has announced that Esmark Inc., a manufacturing firm, and its founder, James Bouchard, will pay a total of $600,000 in civil penalties related to a false tender offer to acquire U.S. Steel Corp.

In August 2023, Esmark declared its intention to buy U.S. Steel for $35 per share, despite lacking the financial capacity to fulfill this promise, according to the SEC statement.

A representative for Esmark and Bouchard did not immediately respond to requests for comments, and they did not admit or deny the SEC’s findings.

Under Bouchard’s direction, Esmark had proposed acquiring all issued and outstanding shares of U.S. Steel, a transaction that would have necessitated $7.8 billion in cash. The SEC claimed these statements were misleading as Esmark and Bouchard did not possess a reasonable belief that they could fund the purchase.

As part of the settlement, Esmark agreed to pay $500,000, while Bouchard will incur a $100,000 penalty. They also committed to adhering to U.S. laws aimed at protecting investors, as stated by the SEC.