EchoStar facing more shareholder allegations
March 12, 2024
By Chris Forrester
EchoStar – already facing complaints from some shareholders over how owner Charlie Ergen restructured the DISH Network broadcasting business into a new operation – is facing another major legal hurdle which, this time, is the US Senate.
Investment fund manager Buxton Helmsley Grp (BHG), which has holdings in EchoStar, has written to US Senators Elizabeth Warren and Sheldon Whitehouse (members of the US Senate Committee on Finance), and arguing that EchoStar has “failed to disclose $15 billion in implicitly admitted equity value overstatement, among other issues.”
The letter alleges that there has been ongoing accounting and securities fraud and that EchoStar has never denied the allegations, noting: “Instead, EchoStar resorted to stripping assets from DISH Network Corporation shortly after BHG had privately brought DISH’s evidenced net asset insolvency to the attention of the EchoStar Board.”
BHG says it also, on March 11th, issued a separate letter to EchoStar’s Board of Directors, discussing the Company’s continued accounting and securities law failures as part of its February 29th Form 10-K. BHG also addressed verbal statements made by the Company’s leadership on its March 1st 2024, earnings call, which further support BHG’s allegations of apparent accounting and securities fraud occurring at the Company.
The BHG letter to the EchoStar board is makes a number of other related allegations: “We will also point out, before beginning, how interesting it is that the Company apparently did not wish for their CFO that signs off on the fully consolidated financial statements (Ms Takacs, as identified in our previous letters) to be present on the March 1st earnings call, but instead the CFO of the subsidiary (DISH) where accounting and securities fraud is most apparent; clearly, the Company wishing to hold DISH’s CFO to the fire instead of Ms Takacs, despite her ultimately signing off on DISH financials. Interestingly, Charlie Ergen was also not present on the March 1st earnings call, after being repeatedly called out in BHG’s public letters for apparent breaches of duty, not to mention apparent accounting and securities fraud occurring at his companies. We do not believe the absence of Ms Takacs and Mr Ergen was anything less than intentional, to attempt escaping possible ‘heat’ from investors after BHG’s letters. If you are not present, you cannot be asked questions by investors, right? Mr Ergen, quite surely in our minds, knew that investors would likely question why he evidentially far overpaid for DISH equity (due to a clear conflict of interest, as discussed in BHG’s previous public and private letters), not to mention why he apparently has yet to deny the allegations of apparent accounting and securities fraud.”