(Article from Registered Funds Regulatory Update, October 2024)
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On September 17, 2024, the SEC charged 11 institutional investment managers for failing to file Forms 13F, as required for entities that manage over $100 million in certain securities. The SEC also charged two of the 11 RIAs with failing to file Forms 13H, as required for large traders who trade a significant amount of exchange-listed securities.
Form 13F filings, required pursuant to Section 13(f) of the Exchange Act and rules adopted thereunder, are due within 45 days of the end of each calendar quarter and are required to disclose, among other things, the market value and quantity of every “Section 13(f) security” position held by the manager as of the end of the applicable quarter. An initial Form 13H filing must be made promptly after effecting transactions (i) in a single day of 2 million shares or $20 million, or (ii) in a calendar month of 20 million shares or $200 million. Thereafter, the large trader must make annual 13H filings, which are due within 45 days of calendar year-end, and if information in the existing Form 13H filing becomes inaccurate, promptly after each applicable calendar quarter. In contrast to Form 13F filings, Form 13H filings are not publicly available.
The Form 13F violations at issue in the Orders resulted from ongoing failures to make required Form 13F filings over extended periods of time, resulting in nine out of the 11 managers filing en masse the backlog of its applicable late Form 13F filings. Each of these managers agreed to pay civil monetary penalties in an aggregate amount totaling more than $3.4 million, a cease-and-desist order, and a censure. The two remaining managers avoided penalties and censures for their Form 13F filing violations by self-reporting and cooperating with investigators. One of the two managers facing charges for failures to file Forms 13H also avoided penalties by self-reporting.
Litigation Rel. No. 2024-135, SEC Charges 11 Institutional Investment Managers with Failing to Report Certain Securities Holdings, (Sept. 17, 2024), available at:
https://www.sec.gov/files/litigation/admin/2024/34-101168.pdf.