WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced Oct. 31 that Millennium Management LLC will pay more than $630,000 after allegations of a U.S. stock short-selling scheme.
Millennium will pay $286,889 in disgorgement plus $51,820.11 in interest. The firm will also pay penalty of $300,000.
The agreement settles allegations that the firm violated Rule 105, a federal securities law focused on anti-manipulation. Under the rule, firms cannot short-sell an equity in the run-up to a covered public offering and then purchase those same securities back after the offerings. Millennium did not admit or deny the violation but agreed to cease and desist from future Rule 105 violations.
“Millennium established and maintained certain accounts that improperly participated in public offerings despite other firm accounts being short the relevant securities,” said Sanjay Wadhwa, senior associate director of the SEC’s New York Regional Office. “We will continue to actively [look] for, and charge, violations of Rule 105 where appropriate.”
Handling the case for the SEC were Nathaniel I. Kolodny, Elizabeth Butler and Thomas P. Smith Jr, under the supervision of Wadhwa.