In re AURIGA GLOBAL

 
 
 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 76145 / October 14, 2015 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-16899 
 
 
In the Matter of 
 
AURIGA GLOBAL 
INVESTORS SOCIEDAD 
            DE VALORES S.A.       
 
Respondent. 
 
 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER AND CIVIL 
PENALTY 
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Auriga Global Investors SV (“Auriga” or 
“Respondent”).  
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings  
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing a Cease-and-Desist Order and Civil Penalty (“Order”), as set forth below.   
 
 
 

 2 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. These proceedings arise out of violations of Rule 105 of Regulation M of the 
Exchange Act by Auriga Global Investors, Sociedad de Valores, S.A., a securities company 
registered with the Comisión Nacional del Mercado de Valores (CNMV), the financial regulatory 
agency of Spain.  Rule 105 prohibits selling short an equity security that is the subject of certain 
public offerings and purchasing the offered security from an underwriter or broker or dealer 
participating in the offering, if such short sale was effected during the restricted period as defined 
therein. 
 
2. On eight occasions between April 2014 and June 2015, Auriga bought offering 
shares from an underwriter or broker or dealer participating in a follow-on public offering after 
having sold short the same security during the Rule 105 restricted period.  These violations 
collectively resulted in profits of $436,940.52.  
 
 
Respondent 
 
 3.  Auriga Global Investors, Sociedad de Valores, S.A., (“Auriga”) is a securities 
company registered with the Comisión Nacional del Mercado de Valores (CNMV), the financial 
regulatory agency of Spain.  Formed in 2007, Auriga is based in Madrid, Spain and has 
approximately $440 million of assets under management.  
 
 
Legal Framework 
 
4. Rule 105 makes it unlawful for a person to purchase equity securities in certain 
public offerings from an underwriter, broker, or dealer participating in the offering if that person 
sold short the security that is the subject of the offering during the restricted period defined in the 
rule, absent an exception.  17 C.F.R. § 242.105; see Short Selling in Connection with a Public 
Offering, Rel. No. 34-56206, 72 Fed. Reg. 45094 (Aug. 10, 2007) (effective Oct. 9, 2007).  The 
Rule 105 restricted period is the shorter of the period:  (1) beginning five business days before the 
pricing of the offered securities and ending with such pricing; or (2) beginning with the initial 
filing of a registration statement or notification on Form 1-A or Form 1-E and ending with the 
pricing.  17 C.F.R. § 242.105(a)(1) and (a)(2).     
 
                                                 
1
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other person 
or entity in this or any other proceeding. 
 

 3 
5. The Commission adopted Rule 105 “to foster secondary and follow-on offering 
prices that are determined by independent market dynamics and not by potentially manipulative 
activity.”  72 Fed. Reg. 45094.  Rule 105 is prophylactic and prohibits the conduct irrespective of 
the short seller’s intent in effecting the short sale.  Id. 
 
 
Auriga’s Violations of Rule 105 of Regulation M 
 
 6.   On January 21 and January 22, 2015, Auriga sold short a total of 75,000 shares of 
Horsehead Holding Corp. (“ZINC”) during the restricted period at a price of $13.7795 per share.  
On January 22, 2015, after the market close, ZINC announced the pricing of a follow-on offering 
of its common stock at $12.75 per share.  Auriga received an allocation of 50,000 shares in that 
offering.  Thus, Auriga’s participation in the ZINC offering resulted in total profits of $51,475.   
  
 7. On April 9 and April 10, 2014, Auriga sold short a total of 75,000 shares of Regado 
Bioscience, Inc. (“RGDO”) during the restricted period at a price of $7.7308 per share.     On April 
11, 2014, RGDO announced the pricing of a follow-on offering of its common stock at $6.00 per 
share.  Auriga received an allocation of 175,000 shares in that offering.  The difference between 
Auriga’s proceeds from the restricted period short sales of RGDO shares and the price paid for 
75,000 shares received in the offering was $129,810.  Thus, Auriga’s participation in the RGDO 
offering resulted in total profits of $129,810.   
 
 8.   On June 16, 2014, Auriga sold short a total of 25,000 shares of Revance 
Therapeutics, Inc. (“RVNC”) during the restricted period at a price of $29.5863 per share.  On June 
18, 2014, RVNC announced the pricing of a follow-on offering of its common stock at $30.50 per 
share. Auriga received an allocation of 60,000 RVNC shares in that offering.  Although the 
offering price was greater than the price at which Auriga sold short during the restricted period, 
Auriga improperly received a benefit of $33,596.50 by purchasing the remaining 35,000 shares in 
the offering at a discount from RVNC’s market price.  Thus, Auriga’s participation in the RVNC 
offering resulted in total profits of $33,596.50   
 
 
 9. On August 12, 2014, Auriga sold short a total of 10,000 shares of Celladon Corp. 
(“CLDN”) during the restricted period at a price of $9.7970 per share.  On August 12, 2014, after 
the market close, CLDN announced the pricing of a follow-on offering of its common stock at 
$9.50 per share.  Auriga received an allocation of 250,000 shares in that offering.  The difference 
between Auriga’s proceeds from the restricted period short sales of CLDN shares and the price 
paid for 10,000 shares received in the offering was $2,970.00. Respondent also improperly 
received a benefit of $11,280.00 by purchasing the remaining 240,000 shares at a discount from 
CLDN’s market price.   Thus, Auriga’s participation in the CLDN offering resulted in total profits 
of $14,250.   
 
 10. On December 10, 2014, Auriga sold short a total of 20,000 shares of Flexion 
Therapeutics, Inc. (“FLXN”) during the restricted period at a price of $18.3818 per share.  On 
December 11, 2014, FLXN announced the pricing of a follow-on offering of its common stock at 

 4 
$17.00 per share.  Auriga received an allocation of 60,000 shares in that offering.  The difference 
between Auriga’s proceeds from the restricted period short sales of FLXN shares and the price 
paid for 20,000 shares received in the offering was $27,636. Respondent also improperly received 
a benefit of $50,208.00 by purchasing the remaining 40,000 shares at a discount from FLXN’s 
market price.  Thus, Auriga’s participation in the FLXN offering resulted in total profits of 
$77,844.   
 
 11. On June 2, 2015, Auriga sold short a total of 40,000 shares of Catalent, Inc. 
(“CTLT”) during the restricted period at a price of $24.4965 per share.  On June 2, 2015, after the 
market close, CTLT announced the pricing of a follow-on offering of its common stock at $29 per 
share. Auriga received an allocation of 35,000 shares in that offering.  Thus, Auriga’s participation 
in the CTLT offering resulted in total profits of $17,377.50.   
 
 12. On June 4, 2015, Auriga sold short a total of 20,200 shares of Ocular Therapeutix, 
Inc. (“OCUL”) during the restricted period at a price of $22.8776 per share.  On June 4, 2015, after 
the market close, OCUL announced the pricing of a follow-on offering of its common stock at $22 
per share. Auriga received an allocation of 125,000 shares in that offering.  The difference between 
Auriga’s proceeds from the restricted period short sales of OCUL shares and the price paid for the 
20,200 shares received in the offering was $17,727.52.  Thus, Auriga’s participation in the OCUL 
offering resulted in total profits of $17,727.52.   
 
 13. On October 28, 2014, Auriga sold short a total of 19,500 shares of Regulus 
Therapeutics, Inc. (“RGLS”) during the restricted period at a price of $17.7089 per share.  On 
October 28, 2014, after the market close, RGLS announced the pricing of a follow-on offering of 
its common stock at $17 per share. Auriga received an allocation of 60,000 shares in that offering.  
The difference between Auriga’s proceeds from the restricted period short sales of RGLS shares 
and the price paid for the 19,500 shares received in the offering was $13,823.55.  Respondent also 
improperly received a benefit of $81,036.45 by purchasing the remaining 40,500 shares at a 
discount from RGLS’s market price.  Thus, Auriga’s participation in the RGLS offering resulted in 
total profits of $94,860.            
 
 14. In total, Auriga’s violation of Rule 105 resulted in profits of $436,940.52. 
 
 
Violations 
 
 15. As a result of the conduct described above, Auriga violated Rule 105 of Regulation 
M under the Exchange Act.  
 
 
 
 
Auriga’s Remedial Efforts & Cooperation 

 5 
16. In determining to accept the Offer, the Commission considered remedial 
acts promptly undertaken by Respondent and cooperation afforded to Commission staff. 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Auriga’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Auriga cease and desist 
from committing or causing any violations and any future violations of Rule 105 of Regulation M of 
the Exchange Act;   
 
 B. Auriga shall within fourteen (14) days of the entry of this Order, pay disgorgement 
of $436,940.52, prejudgment interest of $2,184.70 and a civil money penalty in the amount of 
$179,277.28 (for a total of $618,402.50) to the Securities and Exchange Commission for transfer to 
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 
timely payment is not made on the disgorgement amount, additional interest shall accrue pursuant 
to SEC Rule of Practice 600.  If timely payment is not made on the civil money penalty, additional 
interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payments must be made in one of the following ways: 
 
(1) Respondent may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request;
2
 
 
(2) Respondent may make direct payment from a bank account via Pay.gov through the 
SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
  
(3) Respondent may pay by certified check, bank cashier’s check, or United States postal 
money order, made payable to the Securities and Exchange Commission and hand-
delivered or mailed to: 
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK  73169 
 
 Payments  by  check  or  money  order  must  be  accompanied  by a  cover  letter  identifying 
Auriga as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Gerald W. Hodgkins, Associate Director, 
                                                 
2
  The minimum threshold for transmission of payment electronically is $1,000,000.  For amounts below the 
threshold, respondents must make payments pursuant to options (2) or (3) above. 

 6 
Division of Enforcement, Securities  and Exchange Commission, 100 F Street, N.E., Washington, 
DC  20549. 
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 
 
 
 
 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 76145 / October 14, 2015 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-16899 

 

 

In the Matter of 

 

AURIGA GLOBAL 

INVESTORS SOCIEDAD 

            DE VALORES S.A.       

 

Respondent. 

 

 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER AND CIVIL 

PENALTY 

  

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Auriga Global Investors SV (“Auriga” or 

“Respondent”).  

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings  

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order and Civil Penalty (“Order”), as set forth below.   

 

 

 



 2 

 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

Summary 

 

1. These proceedings arise out of violations of Rule 105 of Regulation M of the 

Exchange Act by Auriga Global Investors, Sociedad de Valores, S.A., a securities company 

registered with the Comisión Nacional del Mercado de Valores (CNMV), the financial regulatory 

agency of Spain.  Rule 105 prohibits selling short an equity security that is the subject of certain 

public offerings and purchasing the offered security from an underwriter or broker or dealer 

participating in the offering, if such short sale was effected during the restricted period as defined 

therein. 

 

2. On eight occasions between April 2014 and June 2015, Auriga bought offering 

shares from an underwriter or broker or dealer participating in a follow-on public offering after 

having sold short the same security during the Rule 105 restricted period.  These violations 

collectively resulted in profits of $436,940.52.  

 

 

Respondent 

 

 3.  Auriga Global Investors, Sociedad de Valores, S.A., (“Auriga”) is a securities 

company registered with the Comisión Nacional del Mercado de Valores (CNMV), the financial 

regulatory agency of Spain.  Formed in 2007, Auriga is based in Madrid, Spain and has 

approximately $440 million of assets under management.  

 

 

Legal Framework 

 

4. Rule 105 makes it unlawful for a person to purchase equity securities in certain 

public offerings from an underwriter, broker, or dealer participating in the offering if that person 

sold short the security that is the subject of the offering during the restricted period defined in the 

rule, absent an exception.  17 C.F.R. § 242.105; see Short Selling in Connection with a Public 

Offering, Rel. No. 34-56206, 72 Fed. Reg. 45094 (Aug. 10, 2007) (effective Oct. 9, 2007).  The 

Rule 105 restricted period is the shorter of the period:  (1) beginning five business days before the 

pricing of the offered securities and ending with such pricing; or (2) beginning with the initial 

filing of a registration statement or notification on Form 1-A or Form 1-E and ending with the 

pricing.  17 C.F.R. § 242.105(a)(1) and (a)(2).     

 

                                                 
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other person 

or entity in this or any other proceeding. 

 



 3 

5. The Commission adopted Rule 105 “to foster secondary and follow-on offering 

prices that are determined by independent market dynamics and not by potentially manipulative 

activity.”  72 Fed. Reg. 45094.  Rule 105 is prophylactic and prohibits the conduct irrespective of 

the short seller’s intent in effecting the short sale.  Id. 

 

 

Auriga’s Violations of Rule 105 of Regulation M 

 

 6.   On January 21 and January 22, 2015, Auriga sold short a total of 75,000 shares of 

Horsehead Holding Corp. (“ZINC”) during the restricted period at a price of $13.7795 per share.  

On January 22, 2015, after the market close, ZINC announced the pricing of a follow-on offering 

of its common stock at $12.75 per share.  Auriga received an allocation of 50,000 shares in that 

offering.  Thus, Auriga’s participation in the ZINC offering resulted in total profits of $51,475.   

  

 7. On April 9 and April 10, 2014, Auriga sold short a total of 75,000 shares of Regado 

Bioscience, Inc. (“RGDO”) during the restricted period at a price of $7.7308 per share.     On April 

11, 2014, RGDO announced the pricing of a follow-on offering of its common stock at $6.00 per 

share.  Auriga received an allocation of 175,000 shares in that offering.  The difference between 

Auriga’s proceeds from the restricted period short sales of RGDO shares and the price paid for 

75,000 shares received in the offering was $129,810.  Thus, Auriga’s participation in the RGDO 

offering resulted in total profits of $129,810.   

 

 8.   On June 16, 2014, Auriga sold short a total of 25,000 shares of Revance 

Therapeutics, Inc. (“RVNC”) during the restricted period at a price of $29.5863 per share.  On June 

18, 2014, RVNC announced the pricing of a follow-on offering of its common stock at $30.50 per 

share. Auriga received an allocation of 60,000 RVNC shares in that offering.  Although the 

offering price was greater than the price at which Auriga sold short during the restricted period, 

Auriga improperly received a benefit of $33,596.50 by purchasing the remaining 35,000 shares in 

the offering at a discount from RVNC’s market price.  Thus, Auriga’s participation in the RVNC 

offering resulted in total profits of $33,596.50   

 

 

 9. On August 12, 2014, Auriga sold short a total of 10,000 shares of Celladon Corp. 

(“CLDN”) during the restricted period at a price of $9.7970 per share.  On August 12, 2014, after 

the market close, CLDN announced the pricing of a follow-on offering of its common stock at 

$9.50 per share.  Auriga received an allocation of 250,000 shares in that offering.  The difference 

between Auriga’s proceeds from the restricted period short sales of CLDN shares and the price 

paid for 10,000 shares received in the offering was $2,970.00. Respondent also improperly 

received a benefit of $11,280.00 by purchasing the remaining 240,000 shares at a discount from 

CLDN’s market price.   Thus, Auriga’s participation in the CLDN offering resulted in total profits 

of $14,250.   

 

 10. On December 10, 2014, Auriga sold short a total of 20,000 shares of Flexion 

Therapeutics, Inc. (“FLXN”) during the restricted period at a price of $18.3818 per share.  On 

December 11, 2014, FLXN announced the pricing of a follow-on offering of its common stock at 



 4 

$17.00 per share.  Auriga received an allocation of 60,000 shares in that offering.  The difference 

between Auriga’s proceeds from the restricted period short sales of FLXN shares and the price 

paid for 20,000 shares received in the offering was $27,636. Respondent also improperly received 

a benefit of $50,208.00 by purchasing the remaining 40,000 shares at a discount from FLXN’s 

market price.  Thus, Auriga’s participation in the FLXN offering resulted in total profits of 

$77,844.   

 

 11. On June 2, 2015, Auriga sold short a total of 40,000 shares of Catalent, Inc. 

(“CTLT”) during the restricted period at a price of $24.4965 per share.  On June 2, 2015, after the 

market close, CTLT announced the pricing of a follow-on offering of its common stock at $29 per 

share. Auriga received an allocation of 35,000 shares in that offering.  Thus, Auriga’s participation 

in the CTLT offering resulted in total profits of $17,377.50.   

 

 12. On June 4, 2015, Auriga sold short a total of 20,200 shares of Ocular Therapeutix, 

Inc. (“OCUL”) during the restricted period at a price of $22.8776 per share.  On June 4, 2015, after 

the market close, OCUL announced the pricing of a follow-on offering of its common stock at $22 

per share. Auriga received an allocation of 125,000 shares in that offering.  The difference between 

Auriga’s proceeds from the restricted period short sales of OCUL shares and the price paid for the 

20,200 shares received in the offering was $17,727.52.  Thus, Auriga’s participation in the OCUL 

offering resulted in total profits of $17,727.52.   

 

 13. On October 28, 2014, Auriga sold short a total of 19,500 shares of Regulus 

Therapeutics, Inc. (“RGLS”) during the restricted period at a price of $17.7089 per share.  On 

October 28, 2014, after the market close, RGLS announced the pricing of a follow-on offering of 

its common stock at $17 per share. Auriga received an allocation of 60,000 shares in that offering.  

The difference between Auriga’s proceeds from the restricted period short sales of RGLS shares 

and the price paid for the 19,500 shares received in the offering was $13,823.55.  Respondent also 

improperly received a benefit of $81,036.45 by purchasing the remaining 40,500 shares at a 

discount from RGLS’s market price.  Thus, Auriga’s participation in the RGLS offering resulted in 

total profits of $94,860.            

 

 14. In total, Auriga’s violation of Rule 105 resulted in profits of $436,940.52. 

 

 

Violations 

 

 15. As a result of the conduct described above, Auriga violated Rule 105 of Regulation 

M under the Exchange Act.  

 

 

 

 

Auriga’s Remedial Efforts & Cooperation 



 5 

16. In determining to accept the Offer, the Commission considered remedial 

acts promptly undertaken by Respondent and cooperation afforded to Commission staff. 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Auriga’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Auriga cease and desist 

from committing or causing any violations and any future violations of Rule 105 of Regulation M of 

the Exchange Act;   

 

 B. Auriga shall within fourteen (14) days of the entry of this Order, pay disgorgement 

of $436,940.52, prejudgment interest of $2,184.70 and a civil money penalty in the amount of 

$179,277.28 (for a total of $618,402.50) to the Securities and Exchange Commission for transfer to 

the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 

timely payment is not made on the disgorgement amount, additional interest shall accrue pursuant 

to SEC Rule of Practice 600.  If timely payment is not made on the civil money penalty, additional 

interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payments must be made in one of the following ways: 

 

(1) Respondent may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request;2 

 

(2) Respondent may make direct payment from a bank account via Pay.gov through the 

SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

  

(3) Respondent may pay by certified check, bank cashier’s check, or United States postal 

money order, made payable to the Securities and Exchange Commission and hand-

delivered or mailed to: 

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK  73169 

 

 Payments by check or money order must be accompanied by a cover letter identifying 

Auriga as a Respondent in these proceedings, and the file number of these proceedings; a copy of 

the cover letter and check or money order must be sent to Gerald W. Hodgkins, Associate Director, 

                                                 
2  The minimum threshold for transmission of payment electronically is $1,000,000.  For amounts below the 

threshold, respondents must make payments pursuant to options (2) or (3) above. 



 6 

Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., Washington, 

DC  20549. 

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 

 

 

 

 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary