The Securities and Exchange Commission (“SEC”) recently sanctioned a number of corporate insiders and public companies for failing to timely report securities holdings and transactions in company stock. The list of respondents included CEOs, board members, investment firms and other major shareholders who failed to timely report their own transactions and holdings, as well as publicly traded companies that contributed to, or failed to report, filing delays by insiders. Because these are strict liability provisions, the SEC may impose such sanctions even if the failure to file was inadvertent, unintentional or unknowing. Indeed, the obligation to make such filings applies irrespective of whether the filer made any profit or the filer’s reasons for engaging in a reportable transaction. The SEC’s actions in these cases are a reminder to all market participants of the importance of the reporting requirements under Section 16(a) and Sections 13(d) and (g) of the Securities Exchange Act of 1934.
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