- SEC reported that it charged Weiss Asset Management with short selling violations.
- IA firm agreed to pay about $6.mn to settle charges it violated federal securities laws when it unlawfully purchased stocks in 7 public offerings after selling same stock short.
- According to order finding, on 7 occasions between December 2020 and February 2021, Weiss Asset Management violated Rule 105 of Regulation M, contained in 17 CFR 242.105.
- Violations occurred because it repeatedly miscalculated restricted period and dismissed a number of red flags raised by its internal controls that suggested possible violations.
- Firm improperly benefited by participating in offerings, over $6.5mn in ill-gotten gains.
- Order highlighted significant remedial efforts undertaken by Weiss Asset Management.
- Also cooperation in investigation, including self-reporting violations to staff after review of its trading records, segregating ill-gotten profits, updating its compliance, training.
- Weiss Asset Management agreed to disgorge profits of $6,508,793 and to pay interest of $190,211 and a penalty of $200,000, and cease and desist from future violations.