On 31 October, SEC fined Millennium $300k for short sales pre-offerings.
- Millennium Management LLC agreed to pay over $630,000 to settle SEC charges.
- Company violated the anti-manipulation provisions of the federal securities laws.
- Firm shorted US stocks in companies which were planning for follow-on offerings.
- After shorting, the firm then illegally bought the shares in the follow-on offering.
- By illegally purchasing shares in follow-on offerings, company made $286k profit.
- Accounts participated in public offerings despite other firm accounts being short.
Rule 105 Violations
- SEC Rule 105 prohibits short selling an equity security during a restricted period.
- Restricted period generally for five business days before covered public offerings.
- Rule bans subsequent purchase of same security as shorted, through an offering.
- Pay disgorgement $286k, interest of $51k and penalty of $300k for total of $637k.