SEC Files Settled Charges Against Multiple Entities for Failing to Timely File Forms D in Connection With Securities Offerings

The Securities and Exchange Commission today announced charges against two private companies and one registered investment adviser for failing to timely file Forms D for several unregistered securities offerings in violation of Rule 503 of Regulation D. The parties charged are: GRID 202 LLC, a registered investment adviser which does business as Re-Envision Wealth; Pipe Technologies Inc., a privately held financial technology company; and Underdog Sports Holdings, Inc., a privately held corporation that operates an online fantasy sports website and mobile app. All offers and sales of securities must either be registered under the Securities Act or fall within an exemption from registration. Regulation D contains certain offering exemptions and a safe harbor from the Securities Act’s registration requirements. To protect investors and safeguard markets, an issuer offering or selling securities in reliance on one of those exemptions or the safe harbor is required to file a Form D within 15 days after the first sale of securities in the offering. An issuer’s failure to follow the requirements to file a Form D (or amend its existing Form D filing) impedes the Commission’s ability to fully assess the scope of the Regulation D market, which is key to the Commission’s understanding of whether Regulation D is appropriately balancing the need for investor protection on one hand and the furtherance of capital formation on the other, particularly as it relates to small businesses. It also harms the Commission’s ability to monitor and enforce compliance with the requirements of Regulation D and the ability of state securities regulators and self-regulatory organizations to monitor and enforce other securities laws and rules. In addition, it hampers the ability of investors and other market participants to understand whether companies are complying with federal securities laws in their offerings, to research and analyze the Regulation D market, and to report on capital-raising in industries that use Regulation D. “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,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Today’s orders find that the charged entities deprived the Commission and the marketplace of timely information concerning nearly $300 million of unregistered securities offerings.” Without admitting or denying the findings, Re-Envision Wealth, Pipe Technologies, and Underdog Sports Holdings agreed to cease and desist from violating the charged provisions and to pay the respective civil penalties of $60,000; $195,000; and $175,000. The SEC’s investigation was conducted by Alicia Guo, Karen M. Lee, and Adam S. Grace of the Enforcement Division’s New York Regional Office and Claire M. Tafelski and Lee A. Greenwood of the Enforcement Division’s Asset Management Unit, with assistance from Beth Groves and Howard Kaplan in the Enforcement Division’s Office of Investigative & Market Analytics, Rachita Gullapalli and Daniel Bresler in the Division of Economic and Risk Analysis and Gerard Sansobrino, Barry Simmons, Christopher Ruvolo, and David S. Eidelman of the Division of Examinations. The investigation was supervised by Sheldon L. Pollock of the New York Regional Office.

The Securities and Exchange Commission today announced charges against two private companies and one registered investment adviser for failing to timely file Forms D for several unregistered securities offerings in violation of Rule 503 of Regulation D. The parties charged are: GRID 202 LLC, a registered investment adviser which does business as Re-Envision Wealth; Pipe Technologies Inc., a privately held financial technology company; and Underdog Sports Holdings, Inc., a privately held corporation that operates an online fantasy sports website and mobile app. All offers and sales of securities must either be registered under the Securities Act or fall within an exemption from registration. Regulation D contains certain offering exemptions and a safe harbor from the Securities Act’s registration requirements. To protect investors and safeguard markets, an issuer offering or selling securities in reliance on one of those exemptions or the safe harbor is required to file a Form D within 15 days after the first sale of securities in the offering. An issuer’s failure to follow the requirements to file a Form D (or amend its existing Form D filing) impedes the Commission’s ability to fully assess the scope of the Regulation D market, which is key to the Commission’s understanding of whether Regulation D is appropriately balancing the need for investor protection on one hand and the furtherance of capital formation on the other, particularly as it relates to small businesses. It also harms the Commission’s ability to monitor and enforce compliance with the requirements of Regulation D and the ability of state securities regulators and self-regulatory organizations to monitor and enforce other securities laws and rules. In addition, it hampers the ability of investors and other market participants to understand whether companies are complying with federal securities laws in their offerings, to research and analyze the Regulation D market, and to report on capital-raising in industries that use Regulation D. “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,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Today’s orders find that the charged entities deprived the Commission and the marketplace of timely information concerning nearly $300 million of unregistered securities offerings.” Without admitting or denying the findings, Re-Envision Wealth, Pipe Technologies, and Underdog Sports Holdings agreed to cease and desist from violating the charged provisions and to pay the respective civil penalties of $60,000; $195,000; and $175,000. The SEC’s investigation was conducted by Alicia Guo, Karen M. Lee, and Adam S. Grace of the Enforcement Division’s New York Regional Office and Claire M. Tafelski and Lee A. Greenwood of the Enforcement Division’s Asset Management Unit, with assistance from Beth Groves and Howard Kaplan in the Enforcement Division’s Office of Investigative & Market Analytics, Rachita Gullapalli and Daniel Bresler in the Division of Economic and Risk Analysis and Gerard Sansobrino, Barry Simmons, Christopher Ruvolo, and David S. Eidelman of the Division of Examinations. The investigation was supervised by Sheldon L. Pollock of the New York Regional Office.