U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 20167 / June 26, 2007
SEC v. GLG Partners, L.P., Civil Action No. 07CV01136 (D.D.C.)
The Securities and Exchange Commission today filed a settled civil action in the United States District Court for the District of Columbia against London-based hedge fund adviser GLG Partners, L.P. for illegal short selling in connection with fourteen public offerings. The Commission’s complaint alleges that over a two-year period, GLG made more than $2.2 million in four of its managed hedge funds by engaging in multiple violations of Rule 105 of Regulation M of the Securities Exchange Act of 1934. Rule 105, designed to prevent manipulative short selling, prohibits covering certain short sales with securities obtained in a public offering. Without admitting or denying the allegations in the Commission’s complaint, GLG consented to pay a $500,000 penalty.
In a related administrative proceeding, the Commission issued a settled cease-and-desist order that finds, from July 2003 through May 2005, GLG violated Rule 105 on 16 occasions in 14 different public offerings in the following funds: GLG Market Neutral Fund; GLG North American Opportunity Fund; GLG Technology Fund; and GLG European Long Short Fund. At the time, GLG did not have any policies, procedures or training on Rule 105. Without admitting or denying the findings, GLG agreed to cease and desist from committing or causing any violations and any future violations of Rule 105 and pay disgorgement of $2,214,180 and prejudgment interest of $489,455.94. GLG also has undertaken to: adopt and implement policies and procedures focused on compliance with Rule 105; provide training on Rule 105 to its employees, including its compliance and legal personnel; and designate a senior-level employee responsible for overseeing GLG’s compliance with Rule 105.
In accepting GLG’s settlement offer, the SEC considered remedial acts undertaken by GLG and GLG’s cooperation in the SEC’s investigation.
The SEC thanks the Financial Services Authority in the United Kingdom for its assistance in this matter.