(Reuters) - The U.S. Securities and Exchange Commission on Friday said manufacturing firm Esmark Inc and its founder have agreed to pay a combined $600,000 in civil penalties in connection with a false tender offer to buy U.S. Steel Corp.
Esmark in August 2023 announced plans to buy U.S. Steel for $35 per share, even though the firm did not have the finances to make good on the offer, the SEC said in a statement.
A lawyer for Esmark and its founder, chairman and former CEO James Bouchard did not respond immediately to call for comment. They did not admit or deny the SEC's findings.
At Bouchard's direction, Esmark announced an offer to buy all issued and outstanding shares of the steelmaker in a deal that would have required $7.8 billion in cash to complete, the SEC said. The statements were false, the SEC said, because Esmark and Bouchard did not have a reasonable belief they would have the means to make the purchase.
As part of the settlement, Esmark and Bouchard agreed to pay civil penalties of $500,000 and $100,000, respectively. They also agreed not to break a U.S. law designed to protect investors, the SEC said.