For the international contemporary live music industry

SFX legend Sillerman agrees to pay SEC penalty of $175,000

World News
August 19, 2019

His roll-up of live music promoters and venues in the late ‘90s, into what eventually became Live Nation, made Robert FX Sillerman a legendary figure and, reportedly, $250 million richer.

However, his second attempt at a similar roll-up of the electronic dance music scene, through the reincarnation of SFX Entertainment, ended in disaster and bankruptcy (see Audience issue 193). 

To add to his problems, the Securities and Exchange Commission (SEC) has charged Sillerman with fraud and diverting offering proceeds to repay himself loans to his former online publishing and entertainment company Function(x) Inc.

The SEC’s claim alleges that Sillerman falsely claimed that two celebrities had agreed to invest in the company and that he created phony subscription documents, with forged signatures, purportedly from the two celebrities.

Function(x) announced that the offering had raised $10m, which would be used for working capital and corporate expansion.

The SEC alleges that the company raised only half that amount and that Sillerman diverted all of the proceeds to his personal bank accounts, as further repayment of loans he had made to the company.

Without admitting or denying the allegations, Sillerman has accepted a permanent director-and-officer bar and will pay the SEC a penalty of $179,000.

In 2000, Sillerman sold his first SFX Entertainment to radio stations and billboards giant Clear Channel Communications (CCC) for $4.4 billion. Five years later CCC spun-off the division as Live Nation, with around $750m of debt.

In 2012, he re-established SFX Entertainment as a promoter of electronic dance music festivals. At the time of its public offering in 2013, the company was valued at more than $1 billion. However, the plan didn’t work and the operation collapsed into bankruptcy. Restructured, the remnants became Livestyle, headed by AEG Live CEO Randy Phillips.

Other Stories

Live Nation puts positive spin on Q2 figures

August 8, 2020
Live Nation Entertainment (LNE) was able to extract some positives from its second quarter (Q2) financial report, which was otherwise as devastating as for just about everyone…
Read more

Barracuda gets full CTS support in banking scandal

August 4, 2020
GERMAN PAN-Europeticketing and promotion giant CTS Eventim has stepped in to support the country’s largest promoter Barracuda Groupo after a bank which holds €34 million…
Read more