A Compliance Reminder: SEC Charges Firms for Late Form D Filings

Published
January 6, 2025

On Dec. 20, 2024, the Securities and Exchange Commission (SEC) announced settled charges against two private companies and one registered investment adviser for failing to timely submit Form D filings for several unregistered securities offerings, violating Rule 503 of Regulation D.

The entities involved include:

  • GRID 202 LLC: A registered investment adviser operating as Re-Envision Wealth.
  • Pipe Technologies Inc.: A privately held financial technology company.
  • Underdog Sports Holdings, Inc.: A privately held corporation managing an online fantasy sports platform.

Regulatory Requirements

Under the Securities Act of 1933, all securities offers and sales must be registered or qualify for an exemption. Regulation D provides exemptions and a safe harbor from registration requirements. Issuers relying on these exemptions must file a Form D within 15 days after the first sale of securities in the offering. Timely Form D filings are crucial for:

  • SEC oversight: Allowing the SEC to monitor the Regulation D market effectively.
  •  Investor protection: Ensuring transparency and informed decision-making.
  • Market integrity: Assisting state regulators and self-regulatory organizations in enforcing securities laws.

Consequences of Non-Compliance

The SEC's investigation revealed that the charged entities failed to submit Form D filings on time, depriving the SEC and the marketplace of timely information concerning nearly $300 million of unregistered securities offerings. Without admitting or denying the findings, the entities agreed to cease and desist from violating the charged provisions and to pay civil penalties:

  •  Re-Envision Wealth: $60,000
  • Pipe Technologies: $195,000
  • Underdog Sports Holdings: $175,000

This enforcement action underscores the importance of adhering to SEC filing requirements, even for smaller entities. Non-compliance can lead to significant penalties and damage to your reputation. (Click here to read the official SEC press release.)

Recommendations

To ensure your business remains compliant and avoids the costly penalties associated with late filings, it’s critical to take proactive steps in managing your regulatory obligations. The following are a few recommendations that can help your organization meet SEC and state Blue Sky requirements and maintain your reputation in the market.

Maintaining compliance with SEC regulations is essential for the integrity of the securities market and the protection of investors. Businesses should remain vigilant in their filing obligations to avoid enforcement actions, such as those charged to GRID 202 LLC, Pipe Technologies Inc. and Underdog Sports Holdings, Inc., and contribute to a transparent and fair marketplace.

If you need assistance navigating SEC requirements or strengthening your compliance processes, Agile Legal’s Fund Services team is here to help.

Learn more about our Fund Services Team.

Authors
Reyner Meikle, Esq.
CEO & President
Reyner Meikle, Esq.
CEO & President
Reyner Meikle, Esq.
CEO & President
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