Statement on Incorrect Filing with the SEC
7/17/2024
The SEC filing which showed that Austin Private Wealth shorted a large number of shares of Trump Media & Technology Group Corp (DJT) was incorrect and we immediately amended it as soon as we learned of the error.
No client of APW holds, or has ever held, a put on DJT in the quantity initially reported. The correct holding amount was 12 contracts, or 1,200 shares — not 12 million shares, as was filed in error. In submitting the required report for the second quarter of 2024, a multiplier was applied by a third-party vendor that increased the number of the shares by a multiple of 10,000 for all options contracts (not just DJT). We did not catch the error before approving the filing.
We filed the report on July 12 to reflect our positions on June 28. We amended it on July 16.
We deeply regret this error and the concern it has caused, especially at such a fraught moment for our nation. We are committed to full transparency and maintaining the trust of our clients. As such, we are reviewing our internal procedures and our processes with the third-party vendor that assists with SEC filings to better understand how this happened and avoid similar issues moving forward.
FAQs about Austin Private Wealth’s 13F EDGAR SEC filing error
7/22/2024
- What is a 13F report?
- The 13F report is a snapshot of holdings in a firm’s accounts as of the end of the most recent quarter that must be submitted to the SEC.
- Who is required to file a 13F report?
- Any investment manager in the US who exercises discretion over $100 million or more is required to file this report quarterly.
- What is the significance of the filing date of a 13F report?
- Investment managers are required to file within 45 days of the end of the most recent quarter (for example, June 30, 2024). There is no significance to the date the report is actually filed; all reports filed during the 45-day time period correspond to the last business day of the previous quarter.
- Do all of the reported positions in a 13F report actually exist? What are amendments?
- 13F filings are self-reported and may contain inaccuracies. These reports do not cause any trades to be placed. Amendments do not mean that a change was made to an actual trade. Amendments are corrections of a filing that was incorrect and did not properly reflect actual positions.
- Example: You make a purchase for takeout that costs $50.00. In your budgeting tool on your phone, you enter an expense for $500,000.00 erroneously. You notice the error and correct it to reflect the $50.00 purchase. You did not ever spend $500,000.00 and correcting it does not result in a profit.
- Why does APW work with an external “editing company” to file 13F reports?
- Our internal system generates a report that contains data in a format that is not ready to be uploaded to EDGAR, which is a system used by the SEC to collect and store legally required filings. External filing companies take these reports and format them specifically for the SEC’s EDGAR filing system. They also maintain a list of 13F securities and remove from the filing any holdings that are not on the list or are in de minimis amounts below the required threshold to be filed.
- How could an error this large have been made?
- Options are sold in contracts, which are lots of 100 shares. 13F reports are intended to be in share format, so editing companies who receive reports in contract format will multiply the number of contracts by 100 to reflect the number of actual shares. In this case, option positions already in share format were multiplied by 10,000. We were not present when this error occurred, but the processor may have mistyped a number into a spreadsheet formula, erroneously removed a decimal, multiplied by 100 twice, or any number of possibilities.
- Why did APW cite an unnamed 3rd party vendor in your statement and correspondence?
- We are being transparent about what happened and aimed in our statement to provide a full accounting. We also accepted responsibility, noting, “We did not catch the error before approving the filing.”
- Does Austin Private Wealth specifically decide to purchase each of the securities or options included in the filing?
- Not necessarily. Many of our clients maintain some amount of self-directed accounts in which they place trades themselves. A security appearing on our EDGAR filing does not necessarily indicate that the security is a part of our overall investment strategy.
- Did APW ever buy 12,000,000 puts on DJT?
- No.
- Why did you remove DJT on your amendment but not remove other smaller options positions?
- The de minimis reporting standards apply not only to options but also to the underlying stock related to the options. Small option positions that are included in the amended report are included because the underlying stock position was above the de minimis amount, either in dollar value, number of shares, or both. Likewise, a large option position would result in reporting an underlying stock that is below de minimis amounts. In the case of DJT, once the error was corrected, the total holdings of the underlying stock and related options were below the de minimis amount for actual reporting.
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Austin Private Wealth is a
Proud Supporter of the McCombs Wealth Management Center
See what our Co-Founder and Co-Managing Partner, Dan Kraus, had to say to the Austin Business Journal's May 28th, 2021 addition HERE.