SEC charges FiveT Capital with violation of trading rule
28 November 2024 US
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The US Securities and Exchange Commission (SEC) has charged FiveT Capital, a Switzerland-based investment adviser, with violating a trading rule.
The SEC's order found that FiveT violated Rule 105 of Regulation M of the Securities Exchange Act of 1934, which prohibits the short selling of an equity security during a restricted period (generally five business days) and then purchasing the same security in the offering.
Rule 105 applies regardless of the trader's intent, and is designed to prevent potentially manipulative short selling before the pricing of covered secondary offerings of securities.
The SEC's investigation, conducted by Geoffrey Gettinger, found that FiveT participated in 14 covered offerings of securities between July and December 2020, after it had sold short the same securities during the restricted period.
Without admitting or denying the findings, FiveT agreed to desist from this practice and to pay a disgorgement of US$1,593,294.73, prejudgment interest of US$357,199.05, and a civil money penalty of US$805,000.
The SEC's order found that FiveT violated Rule 105 of Regulation M of the Securities Exchange Act of 1934, which prohibits the short selling of an equity security during a restricted period (generally five business days) and then purchasing the same security in the offering.
Rule 105 applies regardless of the trader's intent, and is designed to prevent potentially manipulative short selling before the pricing of covered secondary offerings of securities.
The SEC's investigation, conducted by Geoffrey Gettinger, found that FiveT participated in 14 covered offerings of securities between July and December 2020, after it had sold short the same securities during the restricted period.
Without admitting or denying the findings, FiveT agreed to desist from this practice and to pay a disgorgement of US$1,593,294.73, prejudgment interest of US$357,199.05, and a civil money penalty of US$805,000.
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