• SEC charged investment adviser, Sabby Management LLC, and managing partner, Hal Mintz, with fraud in an abusive naked short selling and order making scheme.

Alleged Violations

• From March 2017 to May 2019, Sabby and Mintz circumvented trading rules to conduct unlawful trades in stocks of 10 public companies; engaged in naked short selling.
• Defendants placed short sales when they knew they had not borrowed or located the shares; defendants then failed to make timely delivery of the shares.
• Purpose of scheme was to earn profits they could not have gained in legal trading.
• Used scheme to artificially deflate price of securities to obtain more, cheaper shares.
• Tried to conceal fraudulent trading; lied when questioned by broker regarding trading.

Enforcement

• Seeks permanent injunctive relief, disgorgement plus prejudgment interest, civil fines.