SEC Imposes Over $3.8 Million in Penalties for Violations of Shareholder Disclosure Rules

On 25th September, 2024, the Securities and Exchange Commission (SEC) announced settled charges against 23 entities and individuals for failing to timely report their holdings and transactions in public company stocks. This enforcement action, focused on Schedules 13D, 13G, and Forms 3, 4, and 5, underscores the SEC’s commitment to enforcing shareholder disclosure rules and maintaining transparency in financial markets.

Among the entities penalised are some of the largest and most recognisable names in the corporate world, including Alphabet and Goldman Sachs. The total fines levied amount to more than $3.8 million.

For further details, you can read the official SEC announcement here: SEC Press Release on Shareholder Disclosure Violations.

Some of the most notable penalties issued in this action include:

• Alphabet Inc.: $750,000
• The Goldman Sachs Group, Inc.: $300,000
• Oaktree Capital Management, L.P.: $375,000
• The Bank of Nova Scotia: $375,000

Alphabet, the parent company of Google, faces the largest individual fine of $750,000, while the other firms and individuals were penalised for similar violations of timely reporting obligations.

This enforcement action serves as a powerful reminder of the importance of timely and accurate reporting under SEC rules. The fines highlight several key areas where financial institutions and investors must remain vigilant:

• Monitoring and Aggregating Beneficial Ownership: Organisations must effectively monitor and aggregate beneficial ownership across all subsidiaries to ensure accurate reporting.
• Timely Filings: Whether it’s Schedules 13D, 13G, or Forms 3, 4, and 5, financial institutions must ensure that both initial and subsequent reports are filed without delay to avoid non-compliance penalties.
• Tracking 13F Securities Holdings: Institutional investment managers are required to track their holdings of 13F securities and ensure that their Form 13F submissions are made on time.
• Understanding Rehypothecation: The practice of rehypothecation—when financial firms use client collateral for their own borrowing—can impact beneficial ownership reporting. Institutions need to be fully aware of how this practice could affect their disclosure obligations.

The SEC’s action against these 23 entities and individuals reinforces its dedication to ensuring transparency and compliance within the financial markets. With millions in penalties issued, the regulatory body sends a clear message that non-compliance, whether intentional or through negligence, will not be tolerated.

At Funds-Axis, we understand the complexities involved in shareholding disclosure and the risks of non-compliance. Our automated shareholder disclosure monitoring software provides a seamless solution to manage and monitor shareholding notifications across more than 80 countries, including Bulgaria.

Our platform is designed to support monitoring of:

• Major Shareholdings
• Takeover Disclosures
• Short Selling
• Foreign Investment Rules
• Sensitive Sector Rules

With our automated system, you can reduce manual workloads, avoid costly errors, and ensure that you never miss a critical reporting deadline. Our solution is designed to adapt to evolving regulatory environments, helping you stay ahead of the curve while ensuring compliance with global shareholder disclosure rules.

Don’t risk non-compliance – get ahead of regulatory changes and ensure you meet all your shareholding disclosure requirements with Funds-Axis. Contact us today to learn how our automated compliance platform can simplify your reporting processes and help you avoid costly penalties.

Contact us to arrange a demo and see how we can support your compliance needs.