U.S. Securities and Exchange Commission Launches Investigations Into PPP Loans
Highlights
The SEC has begun investigating recipients of federal PPP loans
The SEC’s initiative is of concern to registered entities and public companies that may have additional disclosure obligations related to their PPP loans
SEC registrants and public companies receiving PPP funds should carefully scrutinize all proposed public disclosures to ensure that they completely and accurately reflect the impact of a PPP loan on an entity’s operations
The U.S. Securities and Exchange Commission (SEC) has begun sending requests for documents to recipients of loans provided under the federal government’s Paycheck Protection Program (PPP) and is looking into how the funds are being used. The U.S. Small Business Administration (SBA) established the PPP to assist small businesses affected by the COVID-19 pandemic. The SEC’s increased scrutiny suggests that it has concerns about the use of these loan proceeds and the legitimacy of loan recipients’ need for federal assistance.
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