SEC Enforcement Actions For Late Form D Filings
In a first, the SEC settled three enforcement actions on December 20, 2024, for failing to timely file a Form D in connection with private offerings. The three companies included one private fund and two private operating businesses.
The SEC enforcement actions were solely related to a violation of Rule 503 (as described below) and did not include any charges of fraud or other nefarious activity. As a result of the settlements each of these companies are prohibited from relying on Regulation D in the future, unless specifically granted a waiver by the SEC.
In its release, the SEC stated that the SEC relies on Form D filings to assess the scope of the Regulation D market and whether the market is balancing the need for investor protection and the furtherance of capital formation, especially for smaller businesses. The SEC also relies on Form D to monitor compliance with the requirements of Regulation D. Likewise, state regulators rely on
Consequences Of Failing To File A Form D
I often get calls from clients or potential clients that have engaged in exempt offerings, have not filed a Form D and are wondering what the consequences might be. Taking it further, what are the consequences of not complying with the minor state blue sky requirements for any federally covered securities?
Form D – In General
A Form D is a brief fill-in-the-blank form that is filed with the SEC in connection with an offering or issuance of securities in reliance on the exemptions from the Securities Act of 1933 (“Securities Act”) registration requirements found in Regulation D. The offering exemptions in Regulation D consist of Rules 504, 506(b) and 506(c) (see HERE).
A Form D is a notice filing. Rule 503 of Regulation D, which was last amended in November 2016, requires that a company relying on Rules 504 or 506 must file a Form D, notice of sales, with the SEC for each new offering
