The Securities and Exchange Commission resolved enforcement actions against six firms, alleging that they unlawfully engaged in short sales, within a restricted period – generally five days before a public offering – and then purchased the relevant securities during the public offering. This conduct is prohibited by an SEC rule (Rule 105 of Regulation M; click here to access). In aggregate, the firms paid fines of more that US $2.5 million to resolve this matter. One firm, War Chest Capital Partners LLC, also consented to a one-year bar from participating in stock offerings because this was the second time the firm has been accused of and settled an action with the SEC for this type of violation. (Click here for information regarding a prior group of SEC enforcement proceedings against firms for similarly violating the relevant SEC rule in the article “US SEC Charges 23 Firms in Connection with Unlawful Short Sales related to Initial Public Offerings; Simultaneously Issues a Risk Alert” in the September 23, 2013 edition of Bridging the Week.)