Sanofi Agrees to Bolster Pension, Match Dividends with Plan Contributions

TPR pressures French biopharmaceutical company to boost UK defined benefit plan funding.


Under pressure from UK pension watchdog The Pension Regulator (TPR), French biopharmaceutical company Sanofi has agreed to bolster its 16,500-member UK defined benefit (DB) plan with an injection of funds.

According to the terms of an agreement between Sanofi and TPR, the company agreed to pay an upfront payment of £37 million ($51.7 million) to its UK pension plan on top of a pledge to pay up to £730 million in case it becomes insolvent over the next 20 years. Additionally, any dividends paid to the wider group by UK-based entities sponsoring the plan will be matched by contribution payments into the plan.

TPR said it opened an investigation into the company’s UK pension plan in August 2019 amid concerns about the progressively weakened direct covenant supporting the plan that had resulted from the company undergoing multiple group restructures over several years. The regulator said that although Sanofi had established a guaranteed package to provide additional financial support, TPR deemed it insufficient.

According to TPR, as of Jan. 1, 2018, Sanofi’s UK plan had an ongoing funding deficit of £279 million and an estimated buyout deficit of close to £1.7 billion.

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The regulator said it was preparing to issue a Warning Notice for Financial Support Directions (FSD) when Sanofi approached TPR and the plan’s trustee to discuss a restructuring of the UK group and to settle the FSD case. Following negotiations between the company, the plan’s trustees, and TPR, a deal was reached that TPR said provides the pension plan with enhanced financial support and significantly increases the likelihood that its participants will receive their benefits in full.

An FSD requires a company and its plan’s trustees to put financial support in place for the plan. To issue an FSD, TPR must consider that a plan’s employer is either a service company or “insufficiently resourced,” which means an employer’s resources are valued at less than 50% of its estimated section 75 debt to the plan. There also needs to be one or more associated or connected entities that have enough value to make up the difference. With an FSD, TPR must also consider that it is reasonable to require a company to provide financial support and consider any relevant issues.

“We signaled our intention to use our anti-avoidance powers, which prompted Sanofi to engage in meaningful discussions with us and the scheme’s trustee,” TPR Director of Enforcement Erica Carroll said in a statement. “This case demonstrates how productive negotiations can be carried out alongside our investigations so that the best possible outcome is achieved for savers. 

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Dentist-Turned-Investment Adviser Charged in Three Frauds by SEC

Edgar Radjabli is accused of manipulating the securities market for Veritone, among other schemes.


Edgar Radjabli, a dentist turned unregistered investment adviser, was charged by the US Securities and Exchange Commission (SEC) for three interrelated securities frauds “of escalating size and potential investor harm.”

According to the SEC’s complaint, Radjabli, who was a practicing dentist as recently as 2015, and an unregistered investment adviser firm he owned and controlled called Apis Capital conducted a fraudulent offering of a digital asset representing tokenized interests in the firm’s main investment fund. The SEC said Radjabli and Apis issued a June 2018 press release falsely claiming that the offering had raised $1.7 million when in fact it raised nothing.

In the second alleged scheme, the SEC accuses Radjabli of manipulating the securities market for Veritone Inc., a publicly traded artificial intelligence (AI) company in which Apis Capital and an affiliated investment fund owned shares. In December 2018, Radjabli and Apis Capital issued a press release announcing an unsolicited cash tender offer to acquire Veritone for $200 million—an 82% premium.

The SEC said the tender offer, and the related forms that Radjabli and Apis Capital filed with the regulator “contained a number of materially false and misleading misrepresentations.” It said they falsely represented that they had current and committed capital “well in excess of the proposed aggregate purchase price,” and that they beneficially owned a 5.03% stake in Veritone.

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“In truth, the defendants lacked the financing, or any reasonable prospect of obtaining the financing, necessary to complete the deal,” said the complaint.

According to the complaint, after the pre-market announcement and SEC filings of the tender offer, Veritone’s stock price opened 41.4% higher than the previous day’s close. Radjabli allegedly capitalized on the price bump by selling Veritone securities and purchasing put options on behalf of Apis Capital and its affiliated fund. The SEC said that 10 days later, Radjabli and Apis Capital withdrew the supposed tender offer. As a result, Radjabli generated illicit profits of approximately $162,800, according to the SEC.

In his third alleged fraud, the SEC says Radjabli raised just under $20 million from 461 investors in an unregistered, fraudulent offering of a security called Health Care Finance High Yield CD Account, which guaranteed a 6% return. The SEC said Radjabli made materially false and misleading representations to investors about how their funds would be used, such as saying that they would be used by Loan Doctor—a company Radjabli was also CEO of—to originate loans to health care professionals, which then would be securitized and sold to large institutional investors.

However, the SEC alleges Loan Doctor never originated or securitized any loans, and that Radjabli instead invested the lion’s share of the investor funds in unsecured and uninsured loans to digital asset lending firms, and loaned almost $1.8 million of investor proceeds to Apis Capital. Radjabli eventually reimbursed investors with the 6% interest and closed down Loan Doctor under the pressure of investigations that had been launched by the SEC and the Consumer Financial Protection Bureau (CFPB).

Without admitting to or denying the allegations in the complaint, Radjabli and Apis Capital have agreed to a settlement under which Radjabli will pay $600,000 in monetary relief. The settlement also permanently enjoins Radjabli, Apis Capital, and Loan Doctor from violating the charged provisions of the federal securities laws, and imposes a conduct-based injunction and penny stock bar on Radjabli, as well as bars him from the securities industry.

“As the SEC alleges, Mr. Radjabli engaged in serial securities fraud that has no place in our markets,” Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, said in a statement.

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