Ten Firms Charged with Violating 8-K Rules
The SEC announced settled enforcement actions against 10 companies for a total of $350,000 in penalties for failing to file required Form 8-Ks. The 10 enforcement actions all accused the respondents of failing to report dilutive stock or financing transactions required to be reported pursuant to Items 1.01 and 3.02 of Form 8-K, a form that generally requires public companies to immediate disclose certain material events. The SEC released a companion Investor Alert titled “How to Read an 8-K.”
OUR TAKE: The buy side should question how much it should rely on corporate disclosure and filings in light of this action and another recent spate of enforcement actions involving Section 13 and 16 filings (See http://blog2.cipperman.com/2014/09/sec-levies-2-6-million-in-penalties-for-beneficial-holdings-reporting-failures/.) These types of technical compliance violations highlight the need to hire regulatory and compliance experts to avoid becoming ensnared in one of these SEC sweeps.