Series 79 practice questionmediumWilliams Act and Tender Offer Regulation
An activist hedge fund has been quietly purchasing shares of a public company and now holds 4.9% of the outstanding common stock. The fund plans to acquire an additional 0.5% tomorrow. Which of the following best describes the fund's disclosure obligation?
- ANo filing is required until the fund exceeds 10%
- BThe fund must immediately halt all trading and notify the SEC within 24 hours
- CThe fund must file a Schedule TO before making additional purchases
- DThe fund must file a Schedule 13D within 10 business days of crossing the 5% threshold✓ Correct answer
Explanation
Why D — The fund must file a Schedule 13D within 10 business days of crossing the 5% threshold
Once the fund crosses the 5% beneficial ownership threshold, it must file a Schedule 13D with the SEC within 10 business days. The filing must disclose the purpose of the acquisition, including any plans to influence or control the company. The fund may continue to purchase shares during the 10-business-day filing window, though any material changes to its plans or holdings must be promptly reported via an amendment.
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