SEC Charges 23 Firms Over Short Selling

The Securities and Exchange Commission (SEC) announced today that it has settled with 22 out of 23 firms on charges of short selling violations for $14.4 million in total sanctions. SEC rules on shorting stocks According to SEC Rule 105, companies are not allowed to short a stock and then immediately buy it again through a public offering, because such moves manipulate prices and generally result in ‘illicit profits’. A five day restriction on shorts before the public offering is typical. “The benchmark of an effective enforcement program is zero tolerance for any securities law violations, including violations that do…