Form 4

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SEC Form 4: Statement of Changes in Beneficial Ownership

SEC Form 4 documents material changes in ownership of a public company’s equity by insiders. It promotes transparency by disclosing purchases, sales, and other changes in an insider’s holdings so investors and regulators can monitor trading by officers, directors, and large shareholders.

Key takeaways

  • Insiders required to file include company officers, directors, and beneficial owners of 10% or more of a class of equity.
  • Form 4 must be filed electronically (EDGAR) within two business days after the transaction date; hardship exceptions are rare.
  • Form 3 is used for initial ownership reports; Form 5 is for late or annual catch-up reporting.
  • Failure to file or to disclose accurately can result in civil or criminal penalties.

What Form 4 reports

Form 4 discloses:
* Identity and relationship of the reporting person to the company.
* Transaction date and type (purchase, sale, gift, grant, exercise of options).
* Number of shares involved and the price per share.
* Changes in total beneficial ownership following the transaction.

This information can be used by the SEC and self-regulatory organizations in investigations or enforcement actions.

Related SEC forms (brief)

  • Form 3 — Initial statement of beneficial ownership (filed when someone first becomes an insider).
  • Form 5 — Annual or late reporting for transactions not reported on Form 4 (filed within 45 days after fiscal year-end).
  • Schedule 13D — Required when an entity acquires more than 5% of a public company’s stock and intends to influence control.
  • Form 8‑K — Current report for unscheduled material events or corporate changes.
  • Form S‑1 — Registration statement for an initial public offering.
  • 10‑K / 10‑Q — Annual and quarterly reports with broader financial and operational disclosures.

Filing requirements and process

  • Deadline: File within two business days following the transaction (counted from the end of the transaction date).
  • Method: Electronic filing via the SEC’s EDGAR system; paper filing allowed only in hardship cases with permission.
  • Content: Must accurately report the nature of the transaction, number of shares, prices, and resulting ownership.

Penalties and enforcement

Inaccurate or late filings can lead to:
* Civil penalties, disgorgement, and administrative sanctions.
* Criminal prosecution in cases of intentional fraud or insider trading.
The SEC routinely reviews Form 4 filings and may refer matters to other authorities.

Case example

In February 2020, a Form 4 filing showed the CEO of a public company purchased 13,037 shares at $767 per share, increasing his total holdings to 34,098,597 shares. Public filings like this provide a record of insider transactions and changes in ownership.

Practical tips for companies and insiders

  • Establish internal procedures to track transactions and ensure timely filing.
  • Coordinate with legal or compliance teams for option exercises and complex transactions.
  • Use EDGAR filing software or counsel to avoid formatting and submission errors.
  • Keep clear records of transaction dates and documentation to support filings.

Sources

U.S. Securities and Exchange Commission — Forms 3, 4, and 5; EDGAR filing system.