Milwaukee-based investment advisory firm Heartland Advisors Inc. was fined $180,000 last month for violating SEC rules.
The civil penalty was part of a settlement of an administrative proceeding with the SEC regarding Heartland’s alleged violation of rules related to beneficial ownership reporting requirements and Form 3 reporting requirements, according to an SEC filing.
A company’s officers, directors and any beneficial owners of more than 10 percent of a class of its equity securities registered under Section 12 of the Securities Exchange Act of 1934 are required to register the ownership with the SEC, according to its regulations. A Form 3 is to be filed by a company insider either: When the company registers equity securities for the first time, by the registration statement’s effective date; or within 10 days of becoming an insider, if the company is already registered. Under Section 13D, those who acquire beneficial ownership of more than 5 percent of the equity securities in a publicly traded company must disclose that information within 10 days.
The instance of this violation was not described in detail. In the settlement, Heartland did not admit fault, but agreed to a cease and desist order requiring future compliance with these rules and agreed to pay the civil penalty.
In a statement, Heartland compliance officer Vinita Paul said the company fully cooperated with the SEC during the course of the investigation.
“This order relates to complex rules related to 13D filings used to disclose stock ownership of greater than 5 percent owners,” Paul said. “As an active value investor for over 30 years, Heartland has regularly engaged with management of companies to maintain or enhance shareholder value. The firm has used 13D filings as an occasional strategy to realize value in the small-cap stocks in which the firm specializes.
“Heartland had policies and procedures in place to assure proper filings are made in accordance with these regulations. Heartland takes its filing responsibilities seriously and continues to review policies and procedures to assure compliance with all disclosure rules.”
Heartland paid the $180,000 and it was not passed along to clients, the filing says.
As of Dec. 31, Heartland managed $1.97 billion in client assets.
