On September 10, 2014, the Securities and Exchange Commission (“SEC”) announced charges against 28 directors, officers and significant shareholders of public companies for repeated failures to timely report their share ownership and transactions on Form 4, Schedule 13D and Schedule 13G. The SEC also announced charges against 6 public companies for contributing to these failures by voluntarily agreeing to assist insiders with their filings, but failing to do so on a timely basis, and by failing to report insiders’ late filings in their periodic reports. All but one of the persons named in the actions has agreed to settle the charges by paying a financial penalty ranging from $25,000 to $150,000, for a total of $2.6 million.
These actions are a reminder that filing beneficial ownership reports late, even inadvertently, can result in personal liability to officers, directors and shareholders as well as to issuers, if they have agreed to assist insiders with their filings. A complete copy of the SEC’s press release can be found here.