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

Regulation M, Rule 105 – Short Selling in Connection 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 by b