Things are shipshape again at Pirate Capital as the hedge fund defused what could have been a potentially nettlesome matter with the Securities and Exchange Commission. Earlier this week, Bloomberg News reported that the Norwalk, Conn.-based firm may have violated SEC rules by failing to file a Schedule 13D when its stake in Outback Steakhouse fell below 5%. The SEC requires a company to notify the agency whenever there is a change of one percentage point; 13D adds to transparency because such reports may indicate a company is a takeover target, for example. Pirate founder Thomas Hudson Jr. explained that his firm didn’t amend its Schedule 13D when its holdings went from less than 6% to less than 5% based on its understanding of the SEC rules. That’s when the SEC told Pirate that it missed the boat with its reasoning. In the end, the firm decided to do as the agency wishes. “While Pirate believes it had sound basis for its position,” Hudson said in statement, “it determined to comply with the [SEC] staff’s comment, and accordingly, amended its Schedules 13D” the next day. According to a regulatory filing, Pirate has sold its entire 5.3% stake in the steakhouse.
