Friday, March 20, 2015

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

Corporate Insiders Charged for Failing to Update Disclosures Involving "Going Private" Transactions
March 13, 2015 (Litigation Release No. 47)
Major shareholders of three different companies have been charged by the SEC for failing to disclose their intentions to privatize. “Beneficial owners” that acquire over 5% voting power are required to file a Schedule 13D with the SEC. This form contains information about the beneficial owners including the intentions behind their purchase. A prompt (within two business days) amendment is required whenever there are material changes to the facts of the form. Berjaya Lottery Management (H.K.) Ltd. has settled with the SEC for $75,000 for waiting eight months to disclose their activities to effect privatization of International Lottery & Totalizator Systems Inc. Similarly, for their delayed disclosure in relation to the privatization of First Physicians Capital Group, Inc., William A. Houlihan has settled for $15,000, SMP Investments I, LLC and Brian Potiker have settled for $63,750, and The Ciabattoni Living Trust, Anthony Ciabattoni and Jane Ciabattoni have settled for $75,000. Shuipan Lin, CEO and Chairman of Exceed Company Ltd., has settled with the SEC for $30,000 for his delayed disclosure of his efforts to privatize his company. Additionally, it was found that Lin’s Schedule 13D was filed over a year and a half late, at which time he had four times the voting power at which the form is required. All respondents have agreed to settle with the SEC without admission or denial of the investigations findings.


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