The Securities and Exchange Commission brought charges against three firms for failing to file Form D on time.
Under Rule 503 of Regulation D, an issuer offering or selling securities in reliance on Rule 504 or 506 must file a notice of sales on Form D with the SEC no later than 15 calendar days after the first sale of securities in the offering. You don’t lose the exemption for a failure to file, but failing to file is a violation of the Securities Act.
The SEC targeted GRID 202 LLC, Pipe Technologies Inc., and Underdog Sports Holdings, Inc. for failing to file. Foot-fault. Easy action by the SEC.
What caught my attention was each of the three orders also stated that the firm engaged in general solicitation and contacted more than [285, 140, or several hundred] prospective investors.
Because Respondent engaged in general solicitation, the offerings could not have been conducted as exempt offerings under Section 4(a)(2) of the Securities Act and therefore could not have been conducted without reliance on Rule 504 or Rule 506(c) of Regulation D. Accordingly, Respondent needed to file a Form D for each offering, but Respondent failed to timely file Forms D for all of these offerings.
It would have been great if the SEC had said what action made those contact “general solicitation” instead of mere “solicitation.” But the orders provide no insight and just state the conclusion that it was general solicitation.
We are just left with reminder to file Form D within 15 calendars of your first sale of interests in a private offering.
Sources:
