On May 1, 2017, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against MagnaChip Semiconductor Corporation (“MagnaChip”) and Margaret Hye-Ryoung Sakai, CPA (“Sakai”) (collectively, the "Respondents"). In the Order, the Commission found that, from mid-2011 to December 2013, the Respondents violated the antifraud, books and records and internal control provisions of the federal securities laws, in connection with a scheme involving improper and fraudulent accounting practices intended to artificially inflate revenue and meet gross margin targets it had previously announced to the public. The Commission ordered MagnaChip and Sakai to pay civil penalties totaling $3,135,000.00. The Commission also created a fair fund (the “Fair Fund”), pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalties can be distributed to harmed investors. See the Commission’s order: Release No. 33-10352.

The Respondents have paid $3,134,499.00 into the Fair Fund for distribution to harmed investors.

On June 14, 2018, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund.

On March 19, 2020, the Commission issued an order appointing Strategic Claims Systems, Inc., as the Fund Administrator to oversee the administration and distribution of the Fair Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No. 34-88430.

On August 17, 2022, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-95511 and the Proposed Plan.

The Proposed Plan provides that the distribution of the Fair Fund shall be made to those injured investors who purchased eligible securities during the relevant period and suffered a recognized loss as calculated by the methodology used in the plan of allocation in the Proposed Plan.

On October 17, 2022, the Commission issued an order extending time to enter an order approving or disapproving plan of distribution until January 31, 2023. See the Commission’s Order: Release No. 34-96095.

On January 19, 2023, the Commission issued an order extending time to enter an order approving or disapproving plan of distribution until April 30, 2023. See the Commission’s Order: Release No. 34-96709.

On May 10, 2023, the Commission issued an order approving the Proposed Plan as posted, and simultaneously posted the approved Plan of Distribution (the “Plan”).   See the Commission’s Order: Release No. 34-97470 and the approved Plan.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov