The U.S. Securities and Exchange Commission (SEC) announced that the charges against Kershner Trading Americas, LLC, a proprietary trading firm based in Austin, Texas, have been resolved. The company was found to have violated SEC trading rules by purchasing 23 times public offerings of stock after short-selling the same stock within a restricted period prohibited by SEC rules.

The SEC's order found that Kershner violated Rule 105 of Regulation M under the Securities Exchange Act of 1934 ("Rule 105"), which prohibits short-selling a stock and then purchasing the same stock in a public offering during a restricted period (typically the five business days before a guaranteed public offering), unless certain exceptions apply.

The rule applies regardless of the trader's intent and is designed to prevent potential manipulative short-selling ahead of priced guaranteed offerings.

The SEC's order determined that Kershner engaged in short-selling the same securities within the restricted period and subsequently participated in 23 subsequent offerings from February 2019 to June 2022, in violation of Rule 105.

Pursuant to the SEC's order, upon learning of the SEC's investigation, Kershner is prohibited from further purchasing equity securities in underwritten offerings by its traders.

If Kershner wishes to purchase equity securities in any covered offering in the future, Kershner agrees to take certain actions, including adopting, implementing, and maintaining written compliance policies and procedures reasonably designed to prevent violations of Rule 105.

Kershner neither admits nor denies the findings in the SEC's order, agrees to cease and desist from conduct that would violate Rule 105, and pays penalties of $593,375.76, pre-judgment interest of $94,268.84, and civil penalties of $812,355.40.