Former SFX executives ordered to pay $7.5 million in stock fraud settlement
For avid fan of electronic dance music, everyone remembers the downfall of SFX Entertainment was at the top of global news headlines. Once the New York City-based concert promotion giant filed for Chapter 11 bankruptcy in early 2016, the move would lead to the demise of Atlanta’s TomorrowWorld and spark speculation of an EDM bubble burst. The move was precedented by a series of bad money decisions made by CEO Robert Sillerman and his ilk of executives who mismanaged $300 million in debt.
SFX was later bought out and restructured by LiveStyle, and although the so-called bubble has not exactly burst, EDM has been on the steady decline over the past three years in terms of global market share (at least in the recorded music sector of the industry). As hip-hop has seen a resurgence in global popularity, EDM has been looked over in the mainstream eye. Breakthrough acts are more scarce and their crossover hits have stopped charting as high. But that’s not the story here.
As of yesterday, SFX Entertainment settled on a massive $7.5 million payout. The settlement is in regards to a lawsuit alleging SFX fraudulently bolstered the company’s stock price when the going got tough. SFX then tried to raise liquidity with a go-private transaction that ultimately failed. The settlement will require SFX Directors D. Geoffrey Armstrong, John Miller, and Michael John Meyer to fork up $6.75 million between them, with Sillerman making up the additional $750,000.
Meanwhile, LiveStyle is in good hands under former AEG Live CEO Randy Phillips. Serving over 6 continents, 20 countries, 1000 events, and over 3.5 million concert attendees worldwide, the Los Angeles-based conglomerate operates Beatport and ticketing firm Paylogic. In addition, LiveStyle puts on Electric Zoo, Spring Awakening, and partners with European promoter ID&T on Tomorrowland.
H/T: Law 360.
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