• SEC reported it charged Honk Kong IA Snow Lake Capital Ltd for trading rule violation.
• IA purchased equity securities on behalf of its advisory clients from an underwriter or B/D participating in follow-on offering, after short selling same securities days before.

Allegations

• Snow Lake violated SEA Rule 105 (17 CFR 242.105) by participating in 5 covered offerings in 2020, 2021 after it had sold short the same securities in restricted period.

Violations

• Snow Lake violated Rule 105 of SEA Regulation M which prohibits short selling an equity security during a restricted period, then purchasing the same security.
• Rule 105 applies regardless of the trader's intent and is designed to prevent manipulative short selling before pricing of covered secondary offerings of securities.
• Enforcement
• Without admitting or denying, Snow Lake agreed to cease and desist from violations and to pay disgorgement of $1,843,582, and prejudgment interest of $391,959.
• Additionally, Snow Lake must pay a civil monetary penalty of $525,000 to the SEC.