“As a private investor, I trade frequently in my personal portfolio. All of a sudden, I got a message from my broker that I am considered a “large trader” and must register with the SEC. What did I do wrong? What should I do now?”
We get asked this a lot. Fortunately, you have done nothing wrong. But you do have to register with the SEC to obtain a “Large Trader ID” and give that to your broker. You need to file Form 13-H with the SEC, but the process to do that is not very straightforward. It is a two-step process, requiring you to (1) authenticate yourself to the SEC with a properly notarized authentication document, and (2) provide additional information about yourself and your “large trade(s)” event for SEC records. Failure to do this can subject you to civil penalties and possibly other sanctions from the SEC.
The good news is that an experienced SEC Filing Agent can take care of all this painlessly for you … for a couple of hundred dollars. The entire process can be completed within a couple of days, and you can then sleep easy knowing that you have fulfilled all requirements asked for by your broker and the SEC.