• SEC charged FiveT Capital AG (FiveT) for buying stock in public offerings of securities for advisory clients after short selling the same stock during a prohibited period.

Allegations

• FiveT violated SEA Rule 105 of Reg M (17 CFR 242.105) while short selling an equity security during a restricted period and then purchasing same security in the offering.
• Firm participated in fourteen covered offerings of securities between July and December 2020, after it had sold short the same securities during the restricted period.
• Violations of Rule 105 resulted in ill-gotten gains to FiveT totaling $1,593,294.73.

Enforcement

• FiveT agreed to cease and desist from Rule 105 violations, pay disgorgement of $1,593,294.73, prejudgment interest of $357,199.05, civil money penalty of $805k.
• FiveT also revised its policies and procedures to address Rule 105 and timely responded to voluntary requests for documents and trading records from SEC staff