SEC and BTIG Continue Discussion on a Principle Settlement

Although BTIG and the United States Securities and Exchange Commission (SEC), have reached a principle settlement, they continue to discuss details. This is evident in a document that was filed by the SEC at the New York Southern District Court February 11, 2022.

Let's recall that in May 2021, the SEC took broker-dealer BTIG, LLC to Court over alleged violations of Regulation SHO. Regulation SHO regulates the selling of securities short. It was intended, in part, for the purpose of limiting naked short-selling and reducing failures to deliver.

According to the Court's status update dated February 11, 2022 the parties participated in a settlement conference presided over by Magistrate Judge Cave. The parties reached a settlement of principle, subject to approval and review by the Commissioners. Injunction, disgorgement and prejudgment interests were part of the settlement in principle. There was also a civil penalty.

Fazzaco Live Webinar Preview: Andrei Savitski Talks About Essentials for Starting A Brokerage​

BTIG's counsel has raised the issue of whether the settlement in principle – namely, the injunction – would result in a "bad actor" disqualification under Rule 506(d) of Regulation D under the Securities Act of 1933, see 17 C.F.R. § 230.506(d). The SEC's counsel confirmed that the injunction would trigger a "bad actor" disqualification unless the SEC grants a waiver of such disqualification.

BTIG's counsel has submitted a draft waiver request letter to the Division of Corporation Finance. On February 2, 2022, the Division of Corporation Finance provided comments on the draft letter to BTIG's counsel. BTIG submitted a revised waiver request letter to Division of Corporation Finance on February 9, 2022 for their consideration.

Accordingly, the SEC and BTIG request that the Court adjourn all deadlines in this case for another 60 days – until April 12, 2022 – so that the waiver request process may be completed and the Commissioners of the SEC may consider the settlement in principle.

Source: Raw News