Short Selling Brothers Agree to Pay $14.5 Million to Settle SEC Charges

An SEC investigation found brothers Jeffery A. Wolfson and Robert A. Wolfson made illegal naked short sales from July 2006 to July 2007. SEC rules require short sellers to locate shares to borrow before selling them short, and they must purchase securities to close out their failures to deliver by a specified date, both of which the brothers failed to do. The brothers have settled, without admitting or denying the findings, agreeing to pay $14.5 million, which includes the $9.5 million in profits from the naked short sales and additional fines and penalties.

For a discussion of short selling and locate requirements, see Guide to Broker-Dealer Regulation, Trading Chapter.

View release in full here (links externally to SEC website).Additional Materials: Order as to Robert A. Wolfson and Golden Anchor Trading II, LLC; Order as to Jeffrey A. Wolfson