Following its previously announced enforcement sweep in September 2023, the Securities and Exchange Commission (SEC) announced on September 25, 2024, that it had settled charges against 23 entities and individuals for failing to timely report information about their holdings and transactions in public company stock, resulting in over $3.8 million in penalties. Without admitting or denying the findings, all entities and individuals agreed to cease committing and causing violations of the respective charged provisions and to pay civil penalties ranging from $10,000 to $750,000.
The SEC charged 13 firms that beneficially owned more than five percent of the registered voting class of public company stock for failing to file or update Schedules 13D and 13G, which provide information about the holdings and intentions of such investors. The SEC also charged 10 individuals who were officers, directors, and/or beneficial owners of more than 10 percent of the stock of public companies for failing to file or update Forms 3, 4, and 5, which report public company stock transactions by such insiders. In addition, the SEC charged two public companies for contributing to filing failures by their officers and directors and failing to report their insiders' filing delinquencies as required. In each case, SEC staff used data analytics to identify the entities and individuals.
This latest enforcement sweep demonstrates the SEC's continued focus on timely reporting of beneficial ownership and insider transaction reports. Thomas P. Smith, Jr., Associate Regional Director of the SEC's Division of Enforcement, confirmed as much in noting that "[t]o make informed investment decisions, shareholders rely on, among other things, timely reports about insider holdings and transactions and changes in potential controlling interests," and that these penalties "are a reminder to large investors that they must commit necessary resources to ensure these reports are filed on time."
Originally Published by 27 September 2024
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