Section 13d reporting requirements need updating
All but one of the individuals and companies named in the enforcement orders reached settlements with the SEC, agreeing to pay financial penalties totaling .6 million.
In a separate case announced the same day, the SEC charged a company and one of its former officers with negligence-based fraud for allegedly failing to report the officer’s sales in the company’s stock for several years, impacting numerous public filings made by the company.
Funds that are fundraising in 2017 (including those that are engaged in continuous offerings) should review their existing subscription documents and placement agent agreements in light of Rule 506(d)’s requirements.
Additionally, managers need to conduct their own internal due diligence to determine the Rule 506(d) status of their relevant personnel, including obtaining “bring-down” representations in certain situations.
The SEC's administrative order found that the respondent, a registered hedge fund adviser, Perry Corp., should have filed a Schedule 13D within 10 days of acquiring beneficial ownership of more than five percent of the shares of Mylan Inc.
and was not entitled to rely on the deferred filing option for institutional passive investors under Rule 13d-1(b).
The 2008-2009 stock market crash and current deep recession are causing many small public companies to reexamine the costs and benefits of remaining listed on a national securities exchange and continuing as a public reporting company under the Securities Exchange Act of 1934 (the “Exchange Act”).
Over the past twelve to eighteen months, many companies have experienced steep declines in their total market capitalization and revenues.
Companies facing delisting are more likely to consider “going dark” than those not under immediate pressure to address their listing status. Funds may be required to submit Rule 506 notice filings (and filing fees) in the US states where they offer securities.Certain states (including New York and Illinois) require that supplemental notice filings be filed for continuous offerings.Advisers to private funds and managed accounts, and family offices, should consider their periodic regulatory and compliance obligations towards the beginning of each new year. Although some items in this list apply only to registered investment advisers,  many are generally applicable to all advisers. Securities Laws Securities Offerings An issuer relying on Rule 506 must file a new Form D notice with the SEC for each new offering of securities no later than 15 calendar days after the date of first sale of securities in the offering. regulatory items that may be of interest to advisers depending on the type of adviser and the current activities, status and investment focus of their clients.