In re Alphabet Inc.

 
 UNITED STATES OF AMERICA 
 Before the 
   SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101165 / September 25, 2024  
                                                               
ADMINISTRATIVE PROCEEDING 
File No. 3-22181 
 
 
 
In the Matter of 
 
Alphabet Inc. 
 
Respondent. 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
  
 
 I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Exchange Act”), against Alphabet Inc. (“Alphabet” or 
“Respondent”).   
II. 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over Respondent and the subject 
matter of these proceedings, which are admitted, Respondent consents to the entry of this Order 
Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange 
Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth 
below.   

 
 
 2 
 
III. 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
Summary 
1. These proceedings arise out of violations of certain securities ownership reporting 
requirements of the federal securities laws.   
2. Section 16(a) of the Exchange Act and the rules promulgated thereunder require 
officers and directors of a company with a registered class of equity security, and any beneficial 
owners of greater than 10% of such class, to file certain reports of securities holdings and 
transactions.  Section 16(a) was motivated by a belief that “the most potent weapon against the 
abuse of inside information is full and prompt publicity” and by a desire “to give investors an idea 
of the purchases and sales by insiders which may in turn indicate their private opinion as to 
prospects of the company.”  H.R. Rep. 73-1383, at 13, 24 (1934).  Reflecting this informational 
purpose, the obligation to file applies irrespective of profits or the filer’s reasons for engaging in the 
transactions.  The Sarbanes-Oxley Act of 2002 and Commission implementing regulations 
accelerated the reporting deadline for most transactions to two business days and mandated that all 
reports be filed electronically on EDGAR to facilitate rapid dissemination to the public. 
3. Section 13(f)(1) of the Exchange Act and the rules promulgated thereunder 
generally require that entities exercised investment discretion over at least $100 million in 
certain reportable securities file Forms 13F with the Commission on a quarterly basis.  One 
Congressional purpose in enacting Section 13(f)(1) of the Exchange Act was to create “a central 
depository of historical and current data about the investment activities of institutional 
investment managers” to assist investors and government regulators.  S. Rep. No. 94-75, 94th 
Cong., 2d Sess. 82-85 (1975). 
4. While subject to the reporting requirements of Section 16(a) as a greater than 10% 
beneficial owner of a registered class of equity securities of Duolingo, Inc. (“Duolingo”) and 
GitLab Inc. (“GitLab”), Alphabet violated Section 16(a) on multiple occasions by failing to timely 
file required reports of holdings and/or transactions.  In addition, while subject to the reporting 
requirements of Section 13(f), Alphabet failed to timely file required Forms 13F for the period 
December 31, 2013 through June 30, 2022.  Alphabet did not file such Forms 13F until 
November 15, 2022.   
Respondent 
5. Alphabet is a Delaware limited liability company headquartered in Mountain 
View, California.  Alphabet is the successor issuer to Google Inc., and its Class A and Class C 
                                                 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on 
any other person or entity in this or any other proceeding. 

 
 
 3 
 
shares are registered with the Commission under Section 12 of the Exchange Act and trade on 
the NASDAQ stock market (GOOGL, GOOG).  Through direct and indirect wholly-owned 
subsidiaries, including subsidiaries that operate as venture capital investment arms that invest for 
profit, Alphabet has direct or indirect beneficial ownership of a portfolio of U.S. exchange-traded 
stocks.  Since at least 2013, Alphabet has met the definition of an “institutional investment 
manager” as defined in Section 13(f) of the Exchange Act because it directly or indirectly 
through wholly-owned subsidiaries invests in or buys and sells securities for its own account.  
Alphabet has also exercised investment discretion over at least $100 million in Section 13(f) 
securities since at least 2013.   
 
Relevant Issuers 
6. Duolingo is a Delaware corporation with its principal place of business in 
Pennsylvania.  Duolingo’s Class A common stock has been registered with the Commission under 
Section 12 of the Exchange Act and traded on the NASDAQ stock market (ticker: DUOL) since its 
initial public offering (“IPO”) on July 27, 2021.  Alphabet and certain subsidiaries became greater 
than 10% beneficial owners of Duolingo’s registered class of Class A common stock at the time of 
the Duolingo IPO and remained as such until at least May 2022. 
 
7. Gitlab is a Delaware corporation and is a remote-only company that does not 
maintain a headquarters.  Gitlab’s Class A common stock has been registered with the Commission 
under Section 12 of the Exchange Act and traded on the NASDAQ stock market (ticker: GTLB) 
since its IPO on October 13, 2021.  Alphabet and certain subsidiaries became greater than 10% 
beneficial owners of Gitlab’s registered class of Class A common stock at the time of the Gitlab IPO 
and remained as such until at least October 2023. 
 
Applicable Legal Framework 
8. Section 16(a) of the Exchange Act and the rules promulgated thereunder apply to 
every person who is the beneficial owner of more than 10% of any class of any equity security 
registered pursuant to Section 12 of the Exchange Act, and any officer or director of the issuer of 
any such security (collectively, “insiders”).  For purposes of determining status as a greater than 
10% beneficial owner under Section 16(a), the term means any person who is deemed a beneficial 
owner under Section 13(d) of the Exchange Act and the rules thereunder,
2
 subject to limited 
exceptions.  
                                                 
2
  Under Section 13(d) of the Exchange Act and the application of Rule 13d-3, a beneficial owner of a 
security includes “any person who, directly or indirectly, through any contract, arrangement, understanding, 
relationship or otherwise” has or shares voting or investment power with respect to such security.  More than one 
person may be a beneficial owner of the same securities.  Because a beneficial owner, under this standard, includes 
persons who have both direct and indirect, as well as shared, voting and investment power, beneficial ownership 
held by an entity is ordinarily also attributable to a control person of an entity and any parent company in a control 
relationship with such entity.  See Amendments to Beneficial Ownership Reporting Requirements, SEC Release No. 
 

 
 
 4 
 
9. Pursuant to Section 16(a) and Rule 16a-3, insiders are required to file initial 
statements of holdings on Form 3 and keep this information current by reporting transactions on 
Forms 4 and 5.  Specifically, within 10 days after becoming an insider, or on or before the effective 
date of the Section 12 registration of the class of equity security, an insider must file a Form 3 report 
disclosing all securities of the issuer in which the insider has or is deemed to have a direct or 
indirect pecuniary interest.  To keep this information current, insiders must file Form 4 reports 
disclosing transactions resulting in a change in beneficial ownership within two business days 
following the execution date of the transaction, except for limited types of transactions eligible for 
deferred reporting.  Transactions required to be reported on Form 4 include purchases and sales of 
securities, exercises and conversions of derivative securities, and grants or awards of securities from 
the issuer.  In addition, insiders are required to file a Form 5 report within 45 days after the issuer’s 
fiscal year-end to report any transactions or holdings that should have been, but were not, reported 
on Form 3 or 4 (as applicable) during the issuer’s most recent fiscal year and any transactions 
eligible for deferred reporting (unless the insider has previously reported all such transactions).  
10. Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder require that 
“institutional investment managers”
3
 file Forms 13F with the Commission on a quarterly basis if 
they exercised investment discretion over “Section 13(f) Securities” having an aggregate fair 
market value of at least $100 million on the last trading day of any month during the preceding 
calendar year.  Section 13(f) Securities are equity securities of a class described in Rule 13f-1(c) 
under the Exchange Act.  A list of these securities—called the Official List of Section 13(f) 
Securities—is available on the Commission’s website.
4
  The Official List of Section 13(f) 
Securities primarily includes U.S. exchange-traded stocks (e.g., NYSE, AMEX, NASDAQ), 
shares of closed-end investment companies, and shares of exchange-traded funds (ETFs).  
Certain convertible debt securities, equity options, and warrants are also on the Official List of 
Section 13(f) Securities.  Pursuant to Rule 13f-1(b), an institutional investment manager is 
deemed to exercise investment discretion over all accounts for which it or any person or entity 
under the control of the institutional investment manager exercises investment discretion.  Form 
13F requires disclosure of, among other things, the fair market value of the institutional 
investment manager’s Section 13(f) Securities under management and a schedule identifying the 
holdings. Forms 13F filed with the Commission are available to the public on the Commission’s 
website. 
 
                                                 
34-39538 (Jan. 12, 1998), 63 Fed. Reg. 2854, 2857 (Jan. 16, 1998).  If the organizational structure of the parent and 
related entities are such that the voting and investment powers over the subject securities are exercised 
independently, attribution may not be required for the purposes of determining the aggregate amount owned by the 
controlling persons if certain conditions concerning independence are met.  Id. 
3
  Section 13(f)(6) of the Exchange Act defines “institutional investment manager” as including “any person, 
other than a natural person, investing in or buying and selling securities for its own account, and any person 
exercising investment discretion with respect to the account of any other person.”   
 
4
  http://www.sec.gov/divisions/investment/13flists.htm 
 
 

 
 
 5 
 
11. An institution that exercised discretion over accounts holding Section 13(f) 
Securities having an aggregate fair market value of least $100 million on the last trading day of 
at least one month in any calendar year must file a Form 13F with the Commission within 45 
days after the last day of such calendar year and within 45 days after the last day of each of the 
first three calendar quarters of the subsequent calendar year.   
 
12. There is no state of mind requirement for violations of Sections 13(f) and 16(a) 
and the rules thereunder.
5
  The failure to timely file a required report, even if inadvertent, 
constitutes a violation.
6
     
Respondent Failed to File Required Section 16(a) Reports on a Timely Basis 
13. As a greater than 10% beneficial owner of Duolingo since its IPO on July 27, 
2021, Alphabet and certain direct or indirect subsidiaries were subject to the reporting 
requirements of Exchange Act Section 16(a) and remained subject to those requirements until at 
least May 2022.  Alphabet and certain subsidiaries jointly filed an initial statement of beneficial 
ownership on Form 3 on July 27, 2021.   
14. Subsequently, Alphabet and these subsidiaries failed to file on a timely basis 
multiple required Section 16(a) reports with the Commission, including to report transactions in 
Duolingo securities executed on the following dates that were required to be reported on Form 4 
within two business days:   
Form Type Date of Trans. Due Date Date Filed 
4 11/4/2021 11/8/2021 2/10/2022 
4 11/15/2021 11/17/2021 2/10/2022 
4 11/16/2021 11/18/2021 2/10/2022 
                                                 
5
   See, e.g., SEC v. e-Smart Technologies, Inc., 82 F. Supp. 3d 97, 104 (D.D.C. 2015) (scienter is not required 
to establish a violation of Section 16(a) of the Exchange Act); cf. SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 
(D.C. Cir. 1978) (“Indeed, the plain language of section 13(d)(1) gives no hint that intentional conduct need be 
found, but rather, appears to place a simple and affirmative duty of reporting on certain persons.  The legislative 
history confirms that Congress was concerned with providing disclosure to investors, and not merely with protecting 
them from fraudulent conduct”).   
6
   Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *2 (May 19, 1980) (Commission opinion) 
(“We have previously held that the failure to make a required report, even though inadvertent, constitutes a willful 
violation”); Herbert Moskowitz, 77 SEC Docket 446, 2002 WL 434524, at *7 (Mar. 21, 2002) (Commission opinion) 
(“evidence of both motive for non-disclosure and actual market impact ... is irrelevant” to whether violations of Section 
13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred); see generally Mandated Electronic Filing 
and Website Posting for Forms 3, 4 and 5, SEC Release No. 34-47809 (May 7, 2003), 68 Fed. Reg. 25788, 25792 
(May 13, 2003) (noting that an issuer’s eligibility for temporary relief from disclosing Forms 4 filed one business day 
late by its insiders “does not change the fact that any Form 3, 4 or 5 filed later than the applicable due date violates 
Section 16(a)”) (emphasis added). 

 
 
 6 
 
Form Type Date of Trans. Due Date Date Filed 
4 11/17/2021 11/19/2021 2/10/2022 
4 11/18/2021 11/22/2021 2/10/2022 
4 11/19/2021 11/23/2021 2/10/2022 
4 11/22/2021 11/24/2021 2/10/2022 
4 11/23/2021 11/26/2021 2/10/2022 
4 11/24/2021 11/29/2021 2/10/2022 
4 11/26/2021 11/30/2021 2/10/2022 
4 11/29/2021 12/1/2021 2/10/2022 
 
15. The above-described late-reported transactions in Duolingo primarily involved 
open-market sales of Duolingo shares that had an aggregate market value in excess of $75 million.  
Alphabet and its subsidiaries failed to report any of these transactions until filing Forms 4 on 
February 10, 2022 to report such transactions—approximately three months after the sales began.   
16. In addition, after Alphabet and certain other subsidiaries became greater than 10% 
beneficial owners of Gitlab upon its IPO on October 13, 2021, Alphabet failed to file any required 
Section 16(a) reports until May 6, 2022—almost seven months late.  It was not until May 6, 2022 
that Alphabet and these subsidiaries jointly filed a Form 3 and a Form 4 to report conversions of 
derivative securities.   
17. As a result of the conduct described above, Respondent violated Section 16(a) of 
the Exchange Act and Rule 16a-3 thereunder.  
Respondent Failed to Timely File Required Form 13F Reports 
18. By at least the last trading day of December 2013, Alphabet exercised investment 
discretion over Section 13(f) Securities with a fair market value of at least $100 million.   
19. Because Alphabet exercised investment discretion over at least $100 million 
worth of Section 13(f) Securities on the last trading day of at least one month in 2013, 
Alphabet was obligated to disclose its 2013 year-end holdings of Section 13(f) Securities by 
filing a Form 13F with the Commission within 45 days of December 31, 2013. 
 
20. Subsequently, Alphabet’s holdings of Section 13(f) Securities continued to be at 
least $100 million.  Thus, from at least February 14, 2014 until the present, Alphabet has had an 
obligation to file Forms 13F on a quarterly basis.  Alphabet, however, failed to file any Forms 
13F prior to November 15, 2022. 
 
21. On November 15, 2022, Alphabet filed 36 Forms 13F covering the quarters 

 
 
 7 
 
ending December 31, 2013 through September 30, 2022, 35 of which were untimely.  Those 
filings showed, among other things, that Alphabet: 
 
• As of December 31, 2013, held positions in 4 different Section 13(f) Securities, 
with a total market value of approximately $365 million; 
 
• As of June 30, 2018, held positions in 17 different Section 13(f) Securities, with a 
total market value of approximately $1.19 billion; 
 
• As of June 30, 2019, held positions in 26 different Section 13(f) Securities, with a 
total market value of approximately $5.27 billion; 
 
• As of June 30, 2020, held positions in 26 different Section 13(f) Securities, with a 
total market value of approximately $2.17 billion; 
 
• As of June 30, 2021, held positions in 44 different Section 13(f) Securities, with a 
total market value of approximately $4.91 billion; and 
 
• As of June 30, 2022, held positions in 65 different Section 13(f) Securities, with a 
total market value of approximately $1.84 billion. 
 
22. As a result of the conduct described above, Alphabet violated Section 13(f)(1) of 
the Exchange Act and Rule 13f-1 thereunder. 
 
Respondent’s Remedial Efforts 
23. In determining to accept Respondent’s Offer, the Commission considered certain 
remedial acts undertaken by Respondent and cooperation afforded to Commission staff. 
IV. 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 Accordingly, it is hereby ORDERED that: 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Alphabet cease and desist 
from committing or causing any violations and any future violations of Sections 13(f)(1) and 16(a) 
of the Exchange Act and Rules 13f-1 and 16a-3 promulgated thereunder.   
B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $750,000 to the Securities and Exchange Commission, for transfer to 
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 

 
 
 8 
 
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  
Payment must be made in one of the following ways:   
(1)  Respondent may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2)  Respondent may make direct payment from a bank account via Pay.gov through 
the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3)  Respondent may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission and hand-
delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Alphabet Inc. as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to Thomas Smith, Associate 
Regional Director, Division of Enforcement, Securities and Exchange Commission, 100 Pearl 
Street, Suite 20-100, New York, NY 10004.   
C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 
a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 
the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
 By the Commission. 
 

 
 
 9 
 
 
       Vanessa A. Countryman 
       Secretary 

UNITED STATES OF AMERICA 

 Before the 

   SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 101165 / September 25, 2024  

                                                               

ADMINISTRATIVE PROCEEDING 

File No. 3-22181 

 

 

 

In the Matter of 

 

Alphabet Inc. 

 

Respondent. 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

  

 

 I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that 

cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 

Securities Exchange Act of 1934 (“Exchange Act”), against Alphabet Inc. (“Alphabet” or 

“Respondent”).   

II. 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the 

findings herein, except as to the Commission’s jurisdiction over Respondent and the subject 

matter of these proceedings, which are admitted, Respondent consents to the entry of this Order 

Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange 

Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth 

below.   



 
 

 2 

 

III. 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

Summary 

1. These proceedings arise out of violations of certain securities ownership reporting 

requirements of the federal securities laws.   

2. Section 16(a) of the Exchange Act and the rules promulgated thereunder require 

officers and directors of a company with a registered class of equity security, and any beneficial 

owners of greater than 10% of such class, to file certain reports of securities holdings and 

transactions.  Section 16(a) was motivated by a belief that “the most potent weapon against the 

abuse of inside information is full and prompt publicity” and by a desire “to give investors an idea 

of the purchases and sales by insiders which may in turn indicate their private opinion as to 

prospects of the company.”  H.R. Rep. 73-1383, at 13, 24 (1934).  Reflecting this informational 

purpose, the obligation to file applies irrespective of profits or the filer’s reasons for engaging in the 

transactions.  The Sarbanes-Oxley Act of 2002 and Commission implementing regulations 

accelerated the reporting deadline for most transactions to two business days and mandated that all 

reports be filed electronically on EDGAR to facilitate rapid dissemination to the public. 

3. Section 13(f)(1) of the Exchange Act and the rules promulgated thereunder 

generally require that entities exercised investment discretion over at least $100 million in 

certain reportable securities file Forms 13F with the Commission on a quarterly basis.  One 

Congressional purpose in enacting Section 13(f)(1) of the Exchange Act was to create “a central 

depository of historical and current data about the investment activities of institutional 

investment managers” to assist investors and government regulators.  S. Rep. No. 94-75, 94th 

Cong., 2d Sess. 82-85 (1975). 

4. While subject to the reporting requirements of Section 16(a) as a greater than 10% 

beneficial owner of a registered class of equity securities of Duolingo, Inc. (“Duolingo”) and 

GitLab Inc. (“GitLab”), Alphabet violated Section 16(a) on multiple occasions by failing to timely 

file required reports of holdings and/or transactions.  In addition, while subject to the reporting 

requirements of Section 13(f), Alphabet failed to timely file required Forms 13F for the period 

December 31, 2013 through June 30, 2022.  Alphabet did not file such Forms 13F until 

November 15, 2022.   

Respondent 

5. Alphabet is a Delaware limited liability company headquartered in Mountain 

View, California.  Alphabet is the successor issuer to Google Inc., and its Class A and Class C 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on 

any other person or entity in this or any other proceeding. 



 
 

 3 

 

shares are registered with the Commission under Section 12 of the Exchange Act and trade on 

the NASDAQ stock market (GOOGL, GOOG).  Through direct and indirect wholly-owned 

subsidiaries, including subsidiaries that operate as venture capital investment arms that invest for 

profit, Alphabet has direct or indirect beneficial ownership of a portfolio of U.S. exchange-traded 

stocks.  Since at least 2013, Alphabet has met the definition of an “institutional investment 

manager” as defined in Section 13(f) of the Exchange Act because it directly or indirectly 

through wholly-owned subsidiaries invests in or buys and sells securities for its own account.  

Alphabet has also exercised investment discretion over at least $100 million in Section 13(f) 

securities since at least 2013.   

 

Relevant Issuers 

6. Duolingo is a Delaware corporation with its principal place of business in 

Pennsylvania.  Duolingo’s Class A common stock has been registered with the Commission under 

Section 12 of the Exchange Act and traded on the NASDAQ stock market (ticker: DUOL) since its 

initial public offering (“IPO”) on July 27, 2021.  Alphabet and certain subsidiaries became greater 

than 10% beneficial owners of Duolingo’s registered class of Class A common stock at the time of 

the Duolingo IPO and remained as such until at least May 2022. 

 

7. Gitlab is a Delaware corporation and is a remote-only company that does not 

maintain a headquarters.  Gitlab’s Class A common stock has been registered with the Commission 

under Section 12 of the Exchange Act and traded on the NASDAQ stock market (ticker: GTLB) 

since its IPO on October 13, 2021.  Alphabet and certain subsidiaries became greater than 10% 

beneficial owners of Gitlab’s registered class of Class A common stock at the time of the Gitlab IPO 

and remained as such until at least October 2023. 

 

Applicable Legal Framework 

8. Section 16(a) of the Exchange Act and the rules promulgated thereunder apply to 

every person who is the beneficial owner of more than 10% of any class of any equity security 

registered pursuant to Section 12 of the Exchange Act, and any officer or director of the issuer of 

any such security (collectively, “insiders”).  For purposes of determining status as a greater than 

10% beneficial owner under Section 16(a), the term means any person who is deemed a beneficial 

owner under Section 13(d) of the Exchange Act and the rules thereunder,2 subject to limited 

exceptions.  

                                                 
2  Under Section 13(d) of the Exchange Act and the application of Rule 13d-3, a beneficial owner of a 

security includes “any person who, directly or indirectly, through any contract, arrangement, understanding, 

relationship or otherwise” has or shares voting or investment power with respect to such security.  More than one 

person may be a beneficial owner of the same securities.  Because a beneficial owner, under this standard, includes 

persons who have both direct and indirect, as well as shared, voting and investment power, beneficial ownership 

held by an entity is ordinarily also attributable to a control person of an entity and any parent company in a control 

relationship with such entity.  See Amendments to Beneficial Ownership Reporting Requirements, SEC Release No. 

 



 
 

 4 

 

9. Pursuant to Section 16(a) and Rule 16a-3, insiders are required to file initial 

statements of holdings on Form 3 and keep this information current by reporting transactions on 

Forms 4 and 5.  Specifically, within 10 days after becoming an insider, or on or before the effective 

date of the Section 12 registration of the class of equity security, an insider must file a Form 3 report 

disclosing all securities of the issuer in which the insider has or is deemed to have a direct or 

indirect pecuniary interest.  To keep this information current, insiders must file Form 4 reports 

disclosing transactions resulting in a change in beneficial ownership within two business days 

following the execution date of the transaction, except for limited types of transactions eligible for 

deferred reporting.  Transactions required to be reported on Form 4 include purchases and sales of 

securities, exercises and conversions of derivative securities, and grants or awards of securities from 

the issuer.  In addition, insiders are required to file a Form 5 report within 45 days after the issuer’s 

fiscal year-end to report any transactions or holdings that should have been, but were not, reported 

on Form 3 or 4 (as applicable) during the issuer’s most recent fiscal year and any transactions 

eligible for deferred reporting (unless the insider has previously reported all such transactions).  

10. Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder require that 

“institutional investment managers”3 file Forms 13F with the Commission on a quarterly basis if 

they exercised investment discretion over “Section 13(f) Securities” having an aggregate fair 

market value of at least $100 million on the last trading day of any month during the preceding 

calendar year.  Section 13(f) Securities are equity securities of a class described in Rule 13f-1(c) 

under the Exchange Act.  A list of these securities—called the Official List of Section 13(f) 

Securities—is available on the Commission’s website.4  The Official List of Section 13(f) 

Securities primarily includes U.S. exchange-traded stocks (e.g., NYSE, AMEX, NASDAQ), 

shares of closed-end investment companies, and shares of exchange-traded funds (ETFs).  

Certain convertible debt securities, equity options, and warrants are also on the Official List of 

Section 13(f) Securities.  Pursuant to Rule 13f-1(b), an institutional investment manager is 

deemed to exercise investment discretion over all accounts for which it or any person or entity 

under the control of the institutional investment manager exercises investment discretion.  Form 

13F requires disclosure of, among other things, the fair market value of the institutional 

investment manager’s Section 13(f) Securities under management and a schedule identifying the 

holdings. Forms 13F filed with the Commission are available to the public on the Commission’s 

website. 

 

                                                 
34-39538 (Jan. 12, 1998), 63 Fed. Reg. 2854, 2857 (Jan. 16, 1998).  If the organizational structure of the parent and 

related entities are such that the voting and investment powers over the subject securities are exercised 

independently, attribution may not be required for the purposes of determining the aggregate amount owned by the 

controlling persons if certain conditions concerning independence are met.  Id. 

3  Section 13(f)(6) of the Exchange Act defines “institutional investment manager” as including “any person, 

other than a natural person, investing in or buying and selling securities for its own account, and any person 

exercising investment discretion with respect to the account of any other person.”   

 
4  http://www.sec.gov/divisions/investment/13flists.htm 

 

 



 
 

 5 

 

11. An institution that exercised discretion over accounts holding Section 13(f) 

Securities having an aggregate fair market value of least $100 million on the last trading day of 

at least one month in any calendar year must file a Form 13F with the Commission within 45 

days after the last day of such calendar year and within 45 days after the last day of each of the 

first three calendar quarters of the subsequent calendar year.   

 

12. There is no state of mind requirement for violations of Sections 13(f) and 16(a) 

and the rules thereunder.5  The failure to timely file a required report, even if inadvertent, 

constitutes a violation.6     

Respondent Failed to File Required Section 16(a) Reports on a Timely Basis 

13. As a greater than 10% beneficial owner of Duolingo since its IPO on July 27, 

2021, Alphabet and certain direct or indirect subsidiaries were subject to the reporting 

requirements of Exchange Act Section 16(a) and remained subject to those requirements until at 

least May 2022.  Alphabet and certain subsidiaries jointly filed an initial statement of beneficial 

ownership on Form 3 on July 27, 2021.   

14. Subsequently, Alphabet and these subsidiaries failed to file on a timely basis 

multiple required Section 16(a) reports with the Commission, including to report transactions in 

Duolingo securities executed on the following dates that were required to be reported on Form 4 

within two business days:   

Form Type Date of Trans. Due Date Date Filed 

4 11/4/2021 11/8/2021 2/10/2022 

4 11/15/2021 11/17/2021 2/10/2022 

4 11/16/2021 11/18/2021 2/10/2022 

                                                 
5   See, e.g., SEC v. e-Smart Technologies, Inc., 82 F. Supp. 3d 97, 104 (D.D.C. 2015) (scienter is not required 

to establish a violation of Section 16(a) of the Exchange Act); cf. SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 

(D.C. Cir. 1978) (“Indeed, the plain language of section 13(d)(1) gives no hint that intentional conduct need be 

found, but rather, appears to place a simple and affirmative duty of reporting on certain persons.  The legislative 

history confirms that Congress was concerned with providing disclosure to investors, and not merely with protecting 

them from fraudulent conduct”).   

6   Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *2 (May 19, 1980) (Commission opinion) 

(“We have previously held that the failure to make a required report, even though inadvertent, constitutes a willful 

violation”); Herbert Moskowitz, 77 SEC Docket 446, 2002 WL 434524, at *7 (Mar. 21, 2002) (Commission opinion) 

(“evidence of both motive for non-disclosure and actual market impact … is irrelevant” to whether violations of Section 

13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred); see generally Mandated Electronic Filing 

and Website Posting for Forms 3, 4 and 5, SEC Release No. 34-47809 (May 7, 2003), 68 Fed. Reg. 25788, 25792 

(May 13, 2003) (noting that an issuer’s eligibility for temporary relief from disclosing Forms 4 filed one business day 

late by its insiders “does not change the fact that any Form 3, 4 or 5 filed later than the applicable due date violates 

Section 16(a)”) (emphasis added). 



 
 

 6 

 

Form Type Date of Trans. Due Date Date Filed 

4 11/17/2021 11/19/2021 2/10/2022 

4 11/18/2021 11/22/2021 2/10/2022 

4 11/19/2021 11/23/2021 2/10/2022 

4 11/22/2021 11/24/2021 2/10/2022 

4 11/23/2021 11/26/2021 2/10/2022 

4 11/24/2021 11/29/2021 2/10/2022 

4 11/26/2021 11/30/2021 2/10/2022 

4 11/29/2021 12/1/2021 2/10/2022 

 

15. The above-described late-reported transactions in Duolingo primarily involved 

open-market sales of Duolingo shares that had an aggregate market value in excess of $75 million.  

Alphabet and its subsidiaries failed to report any of these transactions until filing Forms 4 on 

February 10, 2022 to report such transactions—approximately three months after the sales began.   

16. In addition, after Alphabet and certain other subsidiaries became greater than 10% 

beneficial owners of Gitlab upon its IPO on October 13, 2021, Alphabet failed to file any required 

Section 16(a) reports until May 6, 2022—almost seven months late.  It was not until May 6, 2022 

that Alphabet and these subsidiaries jointly filed a Form 3 and a Form 4 to report conversions of 

derivative securities.   

17. As a result of the conduct described above, Respondent violated Section 16(a) of 

the Exchange Act and Rule 16a-3 thereunder.  

Respondent Failed to Timely File Required Form 13F Reports 

18. By at least the last trading day of December 2013, Alphabet exercised investment 

discretion over Section 13(f) Securities with a fair market value of at least $100 million.   

19. Because Alphabet exercised investment discretion over at least $100 million 

worth of Section 13(f) Securities on the last trading day of at least one month in 2013, 

Alphabet was obligated to disclose its 2013 year-end holdings of Section 13(f) Securities by 

filing a Form 13F with the Commission within 45 days of December 31, 2013. 

 

20. Subsequently, Alphabet’s holdings of Section 13(f) Securities continued to be at 

least $100 million.  Thus, from at least February 14, 2014 until the present, Alphabet has had an 

obligation to file Forms 13F on a quarterly basis.  Alphabet, however, failed to file any Forms 

13F prior to November 15, 2022. 

 

21. On November 15, 2022, Alphabet filed 36 Forms 13F covering the quarters 



 
 

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ending December 31, 2013 through September 30, 2022, 35 of which were untimely.  Those 

filings showed, among other things, that Alphabet: 

 

• As of December 31, 2013, held positions in 4 different Section 13(f) Securities, 

with a total market value of approximately $365 million; 

 

• As of June 30, 2018, held positions in 17 different Section 13(f) Securities, with a 

total market value of approximately $1.19 billion; 

 

• As of June 30, 2019, held positions in 26 different Section 13(f) Securities, with a 

total market value of approximately $5.27 billion; 

 

• As of June 30, 2020, held positions in 26 different Section 13(f) Securities, with a 

total market value of approximately $2.17 billion; 

 

• As of June 30, 2021, held positions in 44 different Section 13(f) Securities, with a 

total market value of approximately $4.91 billion; and 

 

• As of June 30, 2022, held positions in 65 different Section 13(f) Securities, with a 

total market value of approximately $1.84 billion. 

 

22. As a result of the conduct described above, Alphabet violated Section 13(f)(1) of 

the Exchange Act and Rule 13f-1 thereunder. 

 

Respondent’s Remedial Efforts 

23. In determining to accept Respondent’s Offer, the Commission considered certain 

remedial acts undertaken by Respondent and cooperation afforded to Commission staff. 

IV. 

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer. 

 Accordingly, it is hereby ORDERED that: 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Alphabet cease and desist 

from committing or causing any violations and any future violations of Sections 13(f)(1) and 16(a) 

of the Exchange Act and Rules 13f-1 and 16a-3 promulgated thereunder.   

B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $750,000 to the Securities and Exchange Commission, for transfer to 

the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 



 
 

 8 

 

timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  

Payment must be made in one of the following ways:   

(1)  Respondent may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2)  Respondent may make direct payment from a bank account via Pay.gov through 

the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3)  Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission and hand-

delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Alphabet Inc. as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to Thomas Smith, Associate 

Regional Director, Division of Enforcement, Securities and Exchange Commission, 100 Pearl 

Street, Suite 20-100, New York, NY 10004.   

C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 

a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 

the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondent by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 

 By the Commission. 

 



 
 

 9 

 

 

       Vanessa A. Countryman 

       Secretary 


	Respondent