Millennium Management violates SEC security laws 07 November 2017Washington DC Reporter: Jenna Lomax
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Millennium Management has agreed to settle charges of illegal short selling in advance of stock offerings.
The New York-based investment advisory firm agreed to pay more than $630,000 to settle the charges after it admitted that it shorted US stocks in companies planning follow-on offerings, and then illegally bought shares in those follow-on offerings.
The US Securities and Exchange Commission (SEC) claimed that by purchasing shares in the follow-on offerings, Millennium Management gathered $286,889 in illegal profits.
Millennium must pay back all ill-gotten gains, plus interest of $51,820 and a penalty of $300,000.
The SEC found that Millennium Management violated an anti-manipulation provision of the federal securities law, Rule 105, across four occasions back in 2012.
In a statement on the ruling, the SEC explained: 鈥淩ule 105 prohibits short selling an equity security during a restricted period (generally five business days before a covered public offering) and then purchasing that same security through the offering.鈥�
Sanjay Wadhwa, senior associate director of SEC in New York, said: 鈥淢illennium established and maintained certain accounts that improperly participated in public offerings despite other firm accounts being short the relevant securities.鈥�
鈥淲e will continue to actively surveil for, and charge, violations of Rule 105 where appropriate.鈥�
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