On September 17, the Securities and Exchange Commission (“SEC”) announced a settlement of charges against 11 institutional investment managers for failing to file Forms 13F as mandated by Section 13(f) of the Securities Exchange Act.
In an article for Law360, litigation & enforcement partners Dan O'Connor and Bil Davison, and associates Cole Goodman and Brooke Cohen, analyze the implications of this settlement. The attorneys note that given "Section 13(f) has been a sparsely enforced statute," with only five relevant actions prior to 2023, the recent settlement "potentially represents a turning point in the SEC's enforcement approach" to the statute.
Additionally, the attorneys find the SEC's decision to impose no civil monetary penalties on firms that self-reported violations to be "instructive" of the agency's attempt to "convince firms of the value of self-reporting." Still, firms should "consider formalizing and enhancing additional controls around Forms 13F and 13H reporting to avoid becoming the target of what may become the next SEC enforcement sweep," the attorneys add.
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