by Mark S. Bergman, Richard A. Rosen, and Tong Yu
On September 24, 2020, the SEC announced[1] settled charges against BMW AG and two of its U.S. subsidiaries for inaccurate and misleading disclosures included in offering memoranda for Rule 144A offerings of bonds in the United States. The enforcement action arose out of improper reporting of retail sales of BMW vehicles. The enforcement action was based on violations of Section 17(a)(2) and (a)(3) of the U.S. Securities Act of 1933 (the “Securities Act”).[2]
This enforcement action is notable in that it is highly unusual for the SEC to pursue disclosure claims against a foreign issuer (that is not an SEC registrant) undertaking an offering of securities in the United States on a private basis. In 2003, the SEC brought an action against Parmalat Finanziara S.p.A. for violations of Section 17(a) in connection with debt offerings in the United States; the claims arose out of the financial scandal involving Parmalat and certain of its senior managers and directors.