The U.S. Securities and Exchange Commission is reportedly looking into allegations that Nikesh Arora may have had conflicts of interest or acted questionably before he stepped down as president of SoftBank, Sprint's (NYSE: S) parent company.
Citing unnamed "people familiar with the matter," Bloomberg said the SEC's Los Angeles office opened an inquiry, although the move is a preliminary step and neither Arora nor SoftBank have been accused of any wrongdoing. Arora unexpectedly announced his resignation last week after a SoftBank investor group asked the company's board to look into his "qualifications, compensation and potential conflicts of interest due to his role as an adviser at a private equity firm," Bloomberg reported.
Shares of SoftBank had been on the rise but fell as much as 3 percent after the news broke, settling down just .3 percent.
SoftBank issued a statement to Bloomberg saying that while it doesn't comment on reports of regulatory inquiries, a special committee that reviewed the shareholders' allegations "concluded that claims were without merit."
Arora left Google (NASDAQ: GOOG) in July 2014 after more than a decade with the search giant, and a few months later he became CEO of SoftBank Internet & Media. Son promoted him to the role of president of the Japanese corporation in May 2015, and earlier this year the company separated its domestic wireless from other operations, leaving Arora in charge of its majority stake in Sprint and other overseas businesses.
But SoftBank has struggled over the last year as Sprint has weighed down shares of the parent company. Sprint reported a net loss of $554 million during the first quarter of 2016, more than doubling the $224 million loss it recorded during the same period in 2015.
For more:
- read this Bloomberg report
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