First New York Securities LLC was fined US $400,000 and required to pay disgorgement of over US $500,000 by the Financial Industry Regulatory Authority for purchasing securities in secondary offerings that it had just a few days prior sold short. Such short selling is typically prohibited for five days prior to such purchases under a regulation of the Securities Exchange Commission (Rule 105 of Regulation M; click here for a related advisory from the SEC). The firm engaged in such prohibited conduct in connection with 14 public offerings from September 2010 through April 2013, said FIRNA. FINRA noted that the firm self-reported six of the violative instances. In settling this matter without admitting or denying any of FINRA’s findings, First New York also agreed not to participate in any secondary or follow-on offerings for six months. In September 2013, the SEC brought and settled cases against 23 firms for similar violations.
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