Levick Strategic Communications President and CEO Richard S. Levick cites recent activities from activist hedge fund investor Bill Ackman and French fashion leader Bernard Arnault in his Forbes blog discussion on the SEC’s Rule 13D. The rule requires that investors who establish a greater than five percent ownership in a company disclose their status within ten days of obtaining that ownership. Bill Ackman’s acquisition of a 17 percent stake in J.C. Penny was executed and reported under Rule 13D. Levick argues, however, that the ten days might be too permissive, allowing investors to quickly gain control and demand board seats or threaten a proxy contest “before management can catch its breath.”
“Shareholders in this situation might not necessarily favor greater transparency – not when Ackman’s share purchases helped drive the price up by 45 percent,” wrote Levick.