SEC Charges Swiss Investment Adviser with Violating Trading Rule
ADMINISTRATIVE PROCEEDING
File No. 3-22334
November 26, 2024 - The Securities and Exchange Commission today announced settled charges against FiveT Capital AG (“FiveT”), a Switzerland-based investment adviser, for violating an SEC trading rule when it purchased stock in fourteen public offerings of securities for advisory clients after selling short the same stock during a period when the SEC rule prohibited those purchases.
The SEC's order finds that FiveT violated Rule 105 of Regulation M of the Securities Exchange Act of 1934, which 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 in the offering, absent an exception. Rule 105 applies regardless of the trader's intent and is designed to prevent potentially manipulative short selling before the pricing of covered secondary offerings of securities. The SEC's order finds that FiveT violated Rule 105 by participating in fourteen covered offerings of securities between July and December 2020, after it had sold short the same securities during the restricted period.
Without admitting or denying the findings in the SEC's order, FiveT agreed to cease and desist from committing or causing violations of Rule 105, and to pay disgorgement of $1,593,294.73, prejudgment interest of $357,199.05, and a civil money penalty of $805,000.
The SEC's investigation was conducted by Geoffrey E. Gettinger with assistance from Wendy Kong of the Office of Investigative and Market Analytics, and supervised by Ivonia K. Slade. The SEC appreciates the assistance of the Financial Industry Regulatory Authority, the United Kingdom Financial Conduct Authority, and the Swiss Financial Market Supervisory Authority.
Last Reviewed or Updated: Nov. 26, 2024