The SEC has charged 28 CEOs, CFOs, directors and major shareholders for securities law violations in a nationwide crackdown against late or negligent disclosure of changes in stock holdings by insiders. It has also charged six publicly traded companies for contributing to the failure of company insiders to promptly report their stock holdings and transactions.
Jones Lang Lasalle, Starwood Hotels & Resorts and Universal Electronics are among the six companies that have agreed to pay fines of between $75,000 and $150,000 each while major investors Royal Bank of Scotland, Lazarus Management Company, Brown Brothers Harriman and Del Mar Asset Management are among 10 investment firms charged.
The CEOs of Universal Electronics, Sutron Corporation and Willis Lease Finance also agreed to pay penalties, as did CFOs, chairmen and other directors at companies including ChinaCast Education, Dorman Products and Digital Ally.
A total of 33 individuals and companies agreed to settle the charges and pay combined penalties of $2.6 mn, the SEC says. Filings related to insider transactions had been delayed by weeks, months and even years, it adds.
‘Using quantitative analytics, we identified individuals and companies with especially high rates of filing deficiencies, and we are bringing these actions together to send a clear message about the importance of these filing provisions,’ says Andrew Ceresney, director of the SEC’s division of enforcement, in a press release. ‘Officers, directors, major shareholders and issuers should all take note: inadvertence is no defense to filing violations, and we will vigorously police these sorts of violations through streamlined actions.’
All charges concerned two required types of ownership reports designed to allow investors to examine insider shareholders and transactions when making investment decisions. These are Form 4, which requires executives, directors and some major shareholders to disclose transactions within two business days, and Schedule 13D and 13G, which require beneficial owners of more than 5 percent of a registered class of a company’s stock to disclose transactions or intentions with respect to the company.
