SEC Investigates Public Companies who Received PPP Loans

Posted on May 14th, 2020 at 5:00 PM
SEC Investigates Public Companies who Received PPP Loans

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Payroll Protection Program (“PPP”), designed to provide loans to small businesses, has been mired in controversy. Multiple companies, including Shake Shack, Potbelly and the Los Angeles Lakers, have repaid loans received from the PPP after public backlash.  The U.S. Securities and Exchange Commission (“SEC”) has begun conducting a sweep of public companies that received loans from the PPP. 

SEC Enforcement has sent voluntary inquiries to public companies that received PPP loans. The inquiries ask the companies to demonstrate their qualifications for receiving a loan from the PPP, including a showing of how COVID-19 has impacted their business.  

Investment advisers who received PPP loans also need to be aware of the SEC’s guidance for receiving these loans.  According to an FAQ from the SEC, investment advisers who receive PPP loans may need to disclose that loan on their Form ADV. Advisers who receive PPP loans may also be questioned about the loans in future SEC examinations. 

Advisers who have questions about their disclosure requirements for PPP loans should contact the professionals at Eccleston Law.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today. 

Related Attorneys: James J. Eccleston

Tags: eccleston, eccleston law, james eccleston, sec, ppp loans, public companies

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