GLG settles short-selling charges

GLG Partners of London has agreed to pay more than $3.2 million to settle charges of illegal short-selling.
JUN 26, 2007
The SEC has settled actions against GLG Partners LP for illegal short-selling. The London-based alternative asset manager agreed to pay more than $3.2 million connection with 14 public offerings. The payments include $2,214,180 in disgorgement, a prejudgment interest of $489,455.94, and a civil penalty of $500,000. GLG announced yesterday that it will go public by merging with Freedom Acquisition Holdings Inc. and will sell a $1 billion minority stake in Freedom, plus 230 million shares, in a deal valuing the money manager at $2.4 billion (InvestmentNews, June 26). The Securities and Exchange Commission said that the London-based hedge fund made more than $2.2 million in illegal profits in four of its managed hedge funds by creating multiple violations of Rule 105 of Regulation M. The SEC found that GLG violated the rule in 14 different public offerings in four of its funds. Rule 105 is designed to prevent manipulative short selling and prohibits covering certain short sales with securities obtained in a public offering. As part of the settlement, GLG has agreed to adopt and implement policies and procedures focused on compliance with Rule 105.

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