U.S – SEC Short Selling Fraud Scheme

U.S – SEC Short Selling Fraud Scheme

On 12 June 2023, SEC charged investment adviser with short selling fraud.

  • 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.


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