07 November 2017
Washington DC
Reporter: Jenna Lomax

Millennium Management violates SEC security laws


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: “Rule 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.”

Sanjay Wadhwa, senior associate director of SEC in New York, said: “Millennium established and maintained certain accounts that improperly participated in public offerings despite other firm accounts being short the relevant securities.”

“We will continue to actively surveil for, and charge, violations of Rule 105 where appropriate.”

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