Any issuer of securities using the Reg D exemption must file a document with the Securities and Exchange Comission 15 days after the first sale of securities. The two-page document is super simple to complete, and no follow-up filings are required. This simplicity has helped make the Reg D marketplace the single most efficient path to raising capital globally. Unfortunately, it seems, several issuers were tardy in filing the document and thus received penalties assessed by the SEC.
According to a release from last week, the SEC has settled charges against the following entities:
- GRID 202 LLC, a registered investment adviser which does business as Re-Envision Wealth;
- Pipe Technologies Inc., a privately held financial technology [Fintech] company;
- Underdog Sports Holdings, Inc., a privately held corporation that operates an online fantasy sports website and mobile app.
Pipe is a platform that offers embedded finance solutions.
The three entities have paid the penalties without admitting or denying the charges. Re-Envision Wealth paid $60,000; Pipe paid $195,000, and Underdog Sports paid $175,000. They also agreed to stop violating the rules.
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement said the three entities represented nearly $300 million of unregistered securities offerings.
“Form D filings are crucial sources of information on private capital formation, and compliance with the requirement to make such filings in a timely manner is vital to the Commission’s efforts to promote investor protection while also facilitating capital formation, especially with respect to small businesses.”