BTIG LLC Is Sued by SEC for Violating Short-Sale Regulation (1)

BTIG LLC repeatedly violated a regulation intended to prevent illegal short selling, the U.S. Securities and Exchange Commission alleged in a lawsuit against the broker-dealer.

Short sellers borrow shares and sell them in the expectation that the price will fall, then buy them back at the lower price and return them, pocketing the difference. In the suit, filed Wednesday in federal court in Manhattan, the SEC accused BTIG of violating the order-marking and order location requirements of Regulation SHO, which was designed partly to restrict “naked” short selling, the practice of selling shares short that haven’t been borrowed or located. ...