SEC Charges Bermudian Investment Adviser and Principal for Short Selling in Violation of Regulation M (with Lofchie Comment)
The SEC filed a civil injunctive action against Revelation Capital Management Ltd. ("Revelation Capital") and its principal for illegal short selling in connection with an offering in violation of Regulation M. The SEC alleged that Revelation Capital and its principal violated SEC rules by short selling Central Fund of Canada Limited's securities during the defined restricted period and then purchasing the same securities in Central Fund's offering.
Lofchie Comment: Violations of the prohibitions with regard to short selling in Regulation M are very high on the SEC's enforcement list and are regularly the subject of published disciplinary actions. Firms should review their procedures in this area carefully.