SEC Charges 34 Corporate Insiders with Failing to File under Sections 13 and 16 (with Lofchie Comment)

The SEC announced charges against 28 officers, directors and major shareholders for violating federal securities laws requiring them to promptly report information about their holdings and transactions in company stock. Additionally, six publicly traded companies were charged with contributing to filing failures. Nearly all of the 34 individuals and firms charged agreed to settle and pay financial penalties totaling $2.6 million.

The charges, according to the SEC, stem from an enforcement initiative focusing on two types of ownership reports: those relating to Section 13(d) of the Securities Exchange Act (which requires filing by certain "beneficial owners" of 5% positions in certain public equities) and those that fall under Section 16 of the Securities Exchange Act (which requires filings by certain 10% owners and other corporate insiders, such as directors).

Lofchie Comment: The SEC press release indicates that catching Section 13/16 violations will be an ongoing priority. Additionally, as the SEC's access to transaction and position information continues to increase, the detection of persons who do not make the required filings becomes much easier for the SEC.

See: SEC Press Release.