SEC Charges Five Traders with Regulation M Violations
The SEC charged five traders for committing Regulation M short selling violations while trading for themselves. The SEC also charged Worldwide Capital Inc., a proprietary firm that was sanctioned for Rule 105 violations earlier this year.
According to the SEC orders, the traders sold shares short during the restricted period and purchased offering shares of the same securities they had shorted. They purchased the offering shares through accounts they opened in their names or the names of alter ego corporate entities at large broker-dealers, and then executed the short sales of the securities through an account in Worldwide's name at different, smaller broker-dealers.