Series 24: Regulation M, Rule 105– Short Selling InConnection With A Public Offering

Regulation M, Rule 105– Short Selling inConnection with a Public Offering

Rule 105 was designed to curb short selling that may artificially lower the value of a public offering. Prior to this rule, investors would sometimes short a security before a follow-on offering betting that the price of the security would drop prior to the public offering due to the issuance of additional shares. These investors would then cover their short position b