Non-US Adviser to Pay $1.3 Million for Violating Rule 105
A UK-based registered investment adviser agreed to pay over $1.3 Million in fines and disgorgement for violating Rule 105. According to the SEC, the respondent managed a fund that sold short securities within 5 days before purchasing securities of the same issuer in a public offering. The SEC further charges that the respondent had no policies, procedures, or controls in place to prevent Rule 105 violations.
OUR TAKE: Much as US-based advisers sometimes run afoul of securities laws in other jurisdictions, some non-US advisers sometimes don’t know the nuances of US securities laws. This case should get the attention of those non-US advisers who will soon become subject to registration pursuant to the Dodd-Frank Act.