May 11, 2010

SEC Scrutinizes Bets Made by Hedge Funds

Filed under: Uncategorized — ktetaichinh @ 12:53 pm
Tags: , , ,

At issue is a federal provision known as Rule 105, part of Regulation M, which aims to prevent manipulation of securities prices. The rule generally prohibits investors from shorting a stock, or betting against it, five days before issuance of new shares, in order to gain an advantage by buying the shares at depressed prices. The practice, the SEC has said, can reduce an issuer’s proceeds and give investors making the trade an unfair edge.


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