What Is SEC Form 5 & When Is It Due? Securities Lawyer 101

Going Public Lawyers - What is SEC Form 5 and When Is It Due?

Section 16 of the Securities Exchange Act of 1934 requires that officers, directors and holders of more than 10% of a company’s equity securities disclose their ownership of, and transactions in, equity securities, including stock options, warrants and other convertible securities.  Section 16 requires that such persons file an Annual Statement of Changes in Beneficial Ownership on Form 5 with the Securities and Exchange Commission (the “SEC”).  SEC Form 5 reports any transactions in the Company’s equity securities that the reporting person engaged in during the company’s most recently completed fiscal year that were not previously reported on a Form 4, other than transactions that are exempt from Form 5’s reporting obligations. SEC Form 5 is due within 45 days after the company’s year-end.  As such, the due date for Form 5 filings for the year ended December 31, 2014 will be February 14, 2015.  SEC Form 5 must be filed electronically through the SEC’s EDGAR system.

Section 16 reporting is the responsibility of each individual reporting person.  Companies are required to report in their Proxy Statements and Annual Report on Form 10-K any known failure to file a Section 16 report on a timely basis during the most recent fiscal year by any person who was a director, officer, 10% stockholder or other person subject to Section 16.  Under SEC rules, a “known failure to file” includes the failure of any of these persons to file a Form 5, unless the company knows that no Form 5 is required or the person provides the company with a written representation that no Form 5 is required.  The company must maintain any such written representation for two years, and provide a copy to the SEC upon request.

Public companies should keep in mind that the SEC recently charged 28 officers, directors and beneficial holders of SEC reporting issuers for violating Section 16’s reporting requirements.  Six publicly traded companies were also charged for their failure to report insiders’ filing delinquencies in their Form 10-K and/or proxy statements.  The charges resulted in penalties totaling approximately $2.6 million.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or visit www.securitieslawyer101.com.  This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855