The Ontario Teachers’ Pension Plan has agreed to settle with the U.S. Securities and Exchange Commission, which accused it of breaking short-selling rules.
The Canadian pension fund manager was one of 22 firms that reached agreements with the U.S. regulator on Tuesday over allegations they violated rules governing short-selling, which is subject to certain restrictions.
In total, the SEC said the firms have agreed to pay a total of more than $14.4-million (U.S.) in sanctions, while a 23rd firm is challenging the allegations.
Teachers has agreed to pay $224,835.90, including a return of profit, a fine and interest.
In short-selling, a trader bets the price of a stock will fall by borrowing shares and agreeing to sell them and then buying them back at a lower price and returning them to the lender. The SEC said the firms broke rules that prohibit short-selling a stock during the restricted period before a public offering and then buying it through the public offering.
The U.S. regulator alleged Teachers broke the rules four times between July, 2010, and February, 2011, and made $144,898 from the trades.
Teachers, which oversees one of Canada’s largest investment funds, acknowledged settlement in a brief statement. “The SEC has recognized our prompt remedial action and co-operation; we appreciate the quick resolution of this matter,” a spokeswoman said Tuesday.
Among the firms settling the SEC’s charges are Blackthorn Investment Group, Claritas Investments Ltd., Credentia Group, D.E. Shaw & Co., Deerfield Management Company, Hudson Bay Capital Management, JGP Global Gestao de Recursos, M.S. Junior Swiss Capital Holdings and Michael A. Stango, Manikay Partners, Meru Capital Group, Merus Capital Partners, Pan Capital AB, Peak6 Capital Management, Philadelphia Financial Management of San Francisco, Polo Capital International Gestao de Recursos, Soundpost Partners, Southpoint Capital Advisors, Talkot Capital, Vollero Beach Capital Partners, War Chest Capital Partners, and Western Standard.
G-2 Trading LLC is fighting the charges.