SEC and Shift4 Payments Settle Disclosure Violation Case

Shift4 Payments, Inc. (FOUR) and the Securities and Exchange Commission (SEC) reached a settlement on January 10, 2025, resolving allegations that the company failed to make required disclosures in several of its filings. The SEC alleged that Shift4 failed to state in its annual filing and proxy statement for 2020 that the sibling of an executive officer, who was also a child of a director, received about $1.1 million in compensation as a non-executive employee of the company. Additionally, the agency alleged another sibling of an executive officer received more than $280,000 from the company for residual commissions while acting as an independent sales agent not employed by Shift4. The SEC also alleged that Shift4 failed to make similar disclosures in its annual filings and proxy statements through fiscal 2023, during which time immediate family members received more than $120,000 annually in compensation and payments from Shift4. Under the terms of the settlement, Shift4 agreed to stop committing disclosure violations now and in the future.

The SEC's investigation and settlement process unfolded as follows:

1. The SEC discovered that Shift4 failed to disclose certain compensation paid to family members of executive officers in its annual filings and proxy statements.
2. The agency alleged that these failures to disclose material information resulted in Shift4's stock price being artificially inflated, which negatively impacted investors.
3. Shift4 agreed to settle the case by paying a $750,000 fine and committing to cease future disclosure violations.
4. The settlement was approved by the SEC on January 10, 2025.

Key findings from the SEC's investigation include:

1. Shift4 failed to disclose compensation paid to family members of executive officers in its annual filings and proxy statements.
2. These failures to disclose material information resulted in Shift4's stock price being artificially inflated, negatively impacting investors.
3. Shift4 agreed to pay a $750,000 fine and commit to cease future disclosure violations as part of the settlement.
4. The settlement was approved by the SEC on January 10, 2025.

In conclusion, the SEC's investigation and settlement with Shift4 Payments highlight the importance of accurate and timely disclosure of material information by public companies. Investors should be aware of the potential risks associated with investing in companies that fail to comply with disclosure requirements. As always, it is essential to conduct thorough research and due diligence before making investment decisions.