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In early July, John blogged about a rare SEC comment letter to Kimmeridge Energy Management LLC questioning the timing of a Schedule 13D filing and shared a newsletter from Olga Usyvatsky predicting “we will likely see more SEC comments on 13D and 13G filings.” Remember that in October 2023 the SEC adopted amendments shortening the deadlines.

It sounds like Olga’s prediction is coming to pass. Barnes and Thornburg recently blogged about a more recent SEC comment letter also challenging the timeliness of a Schedule 13D filing. Here’s the comment & response:

We note the date of the event reported as requiring the filing of the Statement was February 12, 2024. Rule 13d-1(a) of Regulation 13D-G requires the filing of a Schedule 13D within five business days after the date beneficial ownership of more than five percent of a class of equity securities specified in Rule 13d-1(i)(1) was acquired. Based on the February 12, 2024 event date, the Schedule 13D submitted on May 3, 2024 was not timely filed. Please advise us why the Schedule 13D was not filed within the required five business days after the date of the acquisition.

The Company respectfully advises the Staff that the Schedule 13D was not filed within five business days after the February 12, 2024 event date because the Company initially considered itself eligible to file on Schedule 13G with respect to its holdings in Kyverna Therapeutics, Inc. (“Kyverna”).

The Company was a stockholder of Kyverna since prior to its initial public offering (the “IPO”), which closed on February 12, 2024. At the closing of the IPO, based on its holding of an aggregate of 4,523,924 shares of common stock underlying shares of Series A-1 convertible preferred stock, all of which converted into shares of Kyverna’s common stock at the closing of the IPO, the Company believed that it is entitled to report its beneficial ownership of Kyverna’s equity securities on a Schedule 13G on a later date.

As disclosed in the Schedule 13D, Vida Ventures III, L.P. and Vida Ventures III-A, L.P., funds separately managed from, but affiliated with, the Company acquired a total of 253,136 shares of Kyverna’s common stock at the closing of the IPO. The Company disclosed its beneficial ownership of shares of Kyverna’s common stock, together with such affiliated entities, on a Form 4 promptly following the closing of the IPO, on February 14, 2024. However, the Company was not aware at the time that it was obligated to report such beneficial ownership on a Schedule 13D. Following a review of the affiliated position, including review of Staff guidance with respect to Section 13 filings, the Company determined a 13D was appropriate and filed the Schedule 13D on May 3, 2024. The Company respectfully advises the Staff that future filings by the Company with respect to its beneficial ownership in equity securities of Kyverna will be timely made in accordance with Rule 13d-1(a) of Regulation 13D-G.

The blog says no follow-up letters were made public, and the SEC Staff seems to have accepted this explanation, but warns of a “larger takeaway” — that “the SEC staff appears to be monitoring these filing deadlines as the new rules are implemented,” and “it could also indicate that the reported SEC enforcement sweep on violations of Section 16(a), Section 13(d) and Item 405 disclosure obligations is continuing.”

– Meredith Ervine