As you all know by now, on September 10, the SEC announced enforcement actions against 34 companies and insiders (directors, officers and 10% owners) for:

  • Failing to file timely Section 16(a) reports [Form 4],
  • Failing to disclose insiders’ violations in the Proxy Statement, per Item 405, or
  • Failing to file timely Schedules 13D and 13G.

All but one of the SEC actions settled, with cease-and-desist orders and monetary penalties ranging from $25,000 to $150,000. The enforcement actions came without warning, after more than a decade of little or no SEC enforcement in this area. No one knows yet whether or not this represents a sea-change as to SEC enforcement, but many public companies are reviewing their compliance procedures and filing histories. (We are in frequent contact with the other top practitioner/experts in this area and will pass on to you anything that we learn.)