• SEC settled charges against Canadian Anson Advisors for violations of the SEC's short selling rule, Rule 105 of Regulation M (17 CFR 242.105) under the Exchange Act.

Allegations

• Anson purchased stock in three public offerings for private fund clients after selling short the same security for private fund clients when SEC rule forbade purchases.

Violations

• SEC founds that Anson violated the Rule prohibiting short selling during a restricted period and then purchasing the same security in the offering, absent an exception.
• Rule applies regardless of the trader's intent and is designed to prevent potentially manipulative short selling before the pricing of covered offerings.
• Order finds that AAI violated Rule 105 by participating in three follow-on offerings after it had engaged in short sales of the same securities during the restricted period.

Enforcement

• Without admitting or denying, AAI agreed to a cease and desist order and to disgorge $2,469,109.11, prejudgment interest of $26,285.20, and civil penalty of $600,000