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B. G., Opalesque Geneva:

Weiss Asset Management, a large investment advisory firm in Boston, has agreed to pay approximately $6.9m to settle charges of short selling violations.

According to the U.S. Securities and Exchange Commission (SEC), the firm violated Exchange Act Rule 105 on seven occasions between December 2020 and February 2021.

The Rule prohibits short selling an equity security during a restricted period (generally five business days before a covered public offering) and then purchasing the same security through the offering, absent an exception. The rule applies regardless of the trader's intent and promotes offering prices that are set by natural forces of supply and demand rather than potentially manipulative activity.

Weiss repeatedly miscalculated the restricted period and dismissed a number of red flags raised by its internal controls that suggested possible violations of Rule 105. They benefited by participating in offerings covered by Rule 105, resulting in ill-gotten gains totalling more than $6.5m.

"Holding violators accountable for Rule 105 violations protects the integrity of our markets by deterring short-selling practices that interfere with offering prices," said D. Mark Cave, associate director in the Division of Enforcement. "This settlement credits Weiss Asset Management's cooperation during the investi......................

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