SEC Issues Charges for Failure to Disclose Stock Holdings

On September 10, the U.S. Securities and Exchange Commission charged 34 companies, executives, and shareholders with violations of federal laws requiring disclosure of stock trades and holdings by corporate insiders. The charges mark the first time the SEC has used "sophisticated computer algorithms and quantitative data sources" to identify patterns of late disclosure filings. Required filings were delayed by a period of weeks, months, or years. All except one of the companies charged have settled the case for a total of $2.6 million in penalties. The investigation involved two filings. Form 4 is required of corporate officers, directors, and 10% shareholders, and schedules 13D and 13G are for 5% shareholders.