SEC Censures Firm for Failing to Disclose Control Person
The SEC censured and fined a transfer agent and its principals for failing to disclose the true owner and control person. According to the SEC, the firm’s president arranged a financing deal with a third party lawyer to purchase the firm. The registrant did not disclose in required SEC filings that the third party lawyer owned the firm or that he participated in firm decisions such as hiring, business strategy, agreements and procedures, and leasing premises. The SEC uncovered the control relationship during an examination.
OUR TAKE: One of the first activities that the SEC exam staff undertakes is a fact checking of disclosure documents. Somebody needs to ensure that forms filed with the SEC actually reflect reality.