Copyright 2010 SNL Financial LCAll Rights Reserved SNL Bank Weekly Southern Edition
February 1, 2010
SEC charges 2 companies with improper short selling of securities
The SEC separately charged AGB Partners and Palmyra Capital Advisors for taking part in improper short selling of securities in advance of their participation in a company’s secondary offering.
The SEC said Jan. 26 that it separately charged two investment advisory firms in California for taking part in improper short selling of securities in advance of their participation in a company’s secondary offering.
AGB Partners LLC and its principals Gregory Bied and Andrew Goldberger were charged in connection with a gain of thousands of dollars in improper profits by shorting in advance of their purchase of stock in a secondary offering.
In the other case, the SEC charged Palmyra Capital Advisors LLC for violating short-selling rules and improperly profiting in three of its managed hedge funds.
AGB Partners and Palmyra Capital Advisors have agreed to settle the agency’s charges.
According to the agency’s order, AGB Partners used secondary offering shares in April 2007 to cover a portion of a short position in Boots & Coots International Well Control Inc. AGB Partners sold short shares of BGC Partners Inc. in June 2008 and then purchased the shares in the company’s secondary offering.
The agency said AGB Partners used two accounts, with the first account used for short selling consisting only of Bied’s and Goldberger’s personal funds and the second account, a private investment fund they managed for outside clients, used for participating in the follow-on offerings.
The SEC said in its order against Palmyra Capital Advisors that the firm made short sales in advance of a public offering by Capital One Financial Corp., resulting in improper profits of $225,500. It sold short a total of 50,000 shares of Capital One stock Sept. 18, 2008, and then received 50,000 shares from the company’s secondary offering Sept. 24, 2008.
In settling the SEC’s charges without admitting or denying the agency’s findings, AGB Partners, Bied and Goldberger agreed to be censured and pay more than $50,000 in disgorgement and penalties, while Palmyra Capital Advisors agreed to be censured and pay more than $330,000 in disgorgement and penalties.
February 5, 2010