SEC Sanctions Insiders for Failing to Amend Beneficial Holdings Reports
The SEC censured and fined 8 officers, directors, and major shareholders for failing to timely file or amend Schedule 13D, which requires disclosure of beneficial holdings of public companies. Insiders must report material changes within 2 business days, but the respondents either failed to amend Schedule 13D or filed the amendment months later. The SEC charges that the respondents engaged in “significant steps” toward entering into going private transactions.
OUR TAKE: Buy-siders including advisers and funds must also file 13Ds. This looks like another “broken windows” case where the SEC seeks to punish technical violations of the securities laws in order to maintain order in the broader securities market neighborhood.