Hedge Funds Fined For ‘Shorting Into The Deal’

Sep 17 2014 | 6:19am ET

BlackRock and several hedge funds are among the 19 firms rapped for violating a short-selling restriction.

The Securities and Exchange Commission announced settlements with the firms, including Advent Capital Management, Solus Alternative Asset Management and Whitebox Advisors, and one individual totaling $9 million.

The regulator said those accused violated Rule 105 of Regulation M, which bars “shorting into the deal,” or participating in a public offering after shorting a stock.

Rule 105 violations do not require a show of intent; BlackRock said its three violations in 2010 and 2011 were “inadvertent.”


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