SEC v. CANDLESTICK CAPITAL MANAGEMENT LP; CANDLESTICK MASTER FUND LP; and CANDLESTICK US F&F FUND LP, No. 3:23-cv-00206, District of Connecticut (Feb. 21, 2023) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

SECURITIES AND EXCHANGE
COMMISSION,
    Plaintiff,
 v.

CANDLESTICK CAPITAL
MANAGEMENT LP,
    Defendant,

and

CANDLESTICK MASTER FUND LP and
CANDLESTICK US F&F FUND LP,

                                        Relief Defendants.

Civil Action No.

JURY TRIAL DEMANDED

COMPLAINT
 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
following against the defendant and relief defendants:
SUMMARY
1. This case concerns the violation of Rule 105 of Regulation M under the Securities
Exchange Act of 1934 (the “Exchange Act”) [17 C.F.R. § 242.105] (“Rule 105”) by Candlestick
Capital Management LP (“Candlestick Capital”).  Rule 105 is designed to prevent potentially
manipulative short selling just before the pricing of follow-on and secondary offerings, thereby
allowing independent market forces to determine the price of those offerings.  Rule 105 prohibits
any person who makes a short sale of securities, during a defined restricted period before the
pricing of an offering, from purchasing the same securities in that offering.  Rule 105 prohibits
such conduct irrespective of the short seller’s intent in effecting the short sale.

2

2. Candlestick Capital is the investment adviser to Candlestick Master Fund LP (the
“Master Fund”) and Candlestick US F&F Fund LP (the “F&F Fund,” and, together with the
Master Fund, the “Funds” or “Relief Defendants”).
3. On June 16, 2020, Candlestick Capital sold short common stock of American
Airlines Group Inc. (“American Airlines”) within Rule 105’s restricted period in the Funds’
accounts.  Candlestick Capital then purchased shares of American Airlines common stock for the
Funds in a follow-on offering from a participating underwriter, without qualifying for an
exception from the prohibition in Rule 105.  Candlestick Capital’s conduct resulted in ill-gotten
gains to the Funds of $1,620,398.50.
4. By virtue of the foregoing conduct and as further alleged herein, Candlestick
Capital violated Rule 105.
5. The Commission seeks a final judgment ordering civil money penalties and such
other relief as the Court may deem appropriate.
6. The Commission also seeks relief against the Funds, which received the profits of
Candlestick Capital’s illegal trading and should not be entitled to retain those illegally-derived
gains.
JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Sections 21(d) and 27 of
the Exchange Act [15 U.S.C. §§78u(d) and 78aa].
8. Venue lies in this Court pursuant to Section 27 of the Exchange Act [15 U.S.C.
§78aa].  Certain of the acts, practices, transactions and courses of business alleged in this
Complaint occurred within the District of Connecticut, and were effected, directly or indirectly,
by making use of means or instrumentalities of transportation or communication in interstate

3

commerce, or the mails.  For example, Candlestick Capital directed all of the securities
transactions at issue in this case from Connecticut.
DEFENDANT
9. Candlestick Capital Management LP is a limited partnership organized under the
laws of Delaware and located in Greenwich, Connecticut.  Candlestick Capital is registered with
the Commission as an investment adviser, and advises the Master Fund and F&F Fund, among
other private fund clients.  Candlestick Capital has represented that, as of October 31, 2022, it
had approximately $3 billion in assets under management.
RELIEF DEFENDANTS
10. Candlestick Master Fund LP is a Cayman Island exempted limited partnership.
The Master Fund is a private fund client of Candlestick Capital.
11. Candlestick US F&F Fund LP is a Delaware limited partnership.  The F&F Fund
is a private fund client of Candlestick Capital.
OVERVIEW OF RULE 105
12. Rule 105 makes it unlawful for a person to purchase equity securities from an
underwriter, broker or dealer participating in a covered public offering if that person sold short
the security that is the subject of the offering during the restricted period as 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 Exchange Act Form 1-A or 1-E and ending
with pricing.  17 C.F.R. § 242.105(a)(1) and (a)(2).

4

13. Generally, the offering prices of secondary and follow-on offerings are set at a
discount to the stock’s closing price just prior to pricing.
14. 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.
15. Rule 105 provides an exception for a “bona fide purchase,” which generally does
not prohibit a person from purchasing securities in an offering even if they sold short during the
Rule 105 restricted period as long as they purchase the same security in at least the same amount
as they sold short during the restricted period before the offering is priced.  To qualify as a “bona
fide purchase,” the restricted period purchase must satisfy the following requirements: (i) the
purchase is at least equivalent in quantity to the entire amount of the Rule 105 restricted period
short sale(s); (ii) the purchase is effected during regular trading hours; (iii) the purchase is
reported to an effective transaction reporting plan (as defined in Rule 600(b)(22) of Regulation
NMS); (iv) the purchase is effected after the last Rule 105 restricted period short sale, and no
later than the business day prior to the day of pricing; and (v) the person did not effect a short
sale that was reported to an effective transaction reporting plan within the 30 minutes prior to the
close of regular trading hours (as defined in Rule 600(b)(64) of Regulation NMS) on the
business day prior to the day of pricing.  17 C.F.R. § 242.105(b).  The requirements of the bona
fide purchase exception are designed to ensure transparency of the activity to the market so that
the effects of the purchase can be reflected in the security’s market price prior to the pricing of
the offering.  See 72 Fed. Reg. 45094, 45097.

5

FACTS
16. On Tuesday, June 16, 2020, Candlestick Capital sold short a combined total of
350,000 shares of American Airlines common stock at an average price of $17.62891 per share
in the Funds’ accounts.
17. On Sunday, June 21, 2020, American Airlines filed a preliminary prospectus
supplement to a shelf registration statement previously filed on February 19, 2020, for a follow-
on offering of its common stock to be priced after the market closed on Monday, June 22, 2020
(the “Offering”).
18. On Monday, June 22, 2020, the day the Offering was priced, Candlestick Capital
recognized that the Funds’ June 16, 2020 short sale of American Airlines common stock fell
within the restricted period and that the Funds could not participate in the Offering absent a valid
exception.  Candlestick Capital purchased a combined total of 350,000 shares of American
Airlines common stock in the Funds’ accounts in the open market, during regular trading hours,
in a failed attempt to fall within the terms of the bona fide purchase exception to Rule 105.
19. After the market closed on Monday, June 22, 2020, American Airlines priced the
Offering at $13.50 per share.
20. The short sales that Candlestick Capital effected for the Funds occurred within the
Rule 105 restricted period, which ran from Tuesday, June 16, 2020 through Monday, June 22,
2020.
21. For the Funds to meet the requirements of the Rule 105 bona fide purchase
exception, they would have had to purchase at least 350,000 shares of American Airlines
common stock in the open market, during regular trading hours, by the market close on Friday,
June 19, 2020.

6

22. Shortly after market close on Monday, June 22, 2020, Candlestick Capital
submitted an indication of interest to a participating underwriter on behalf of the Funds to
purchase 750,000 shares in the Offering.  Later that evening, certain Candlestick Capital
personnel raised concerns that Candlestick Capital may have failed to meet the conditions of the
Rule 105 bona fide purchase exception.
23. On Tuesday, June 23, 2020, Candlestick Capital nevertheless received an
allocation of 750,000 shares in the Offering.  Later that day, Candlestick Capital determined that
it had failed to meet the bona fide purchase exception and that it violated Rule 105 by purchasing
shares in the Funds’ accounts to participate in the Offering.
24. The difference between the price at which the Funds sold short 350,000 shares of
American Airlines common stock during the restricted period and the price at which the Funds
purchased 350,000 shares in the Offering was $1,445,118.50.
25. The Funds also improperly received a benefit of $175,280 by purchasing the
incremental 400,000 Offering shares at a discount from American Airlines’ market price.
26. Thus, the Funds received total profits of $1,620,398.50 by participating in the
Offering, of which $1,565,305.83 was received by the Master Fund and $55,092.67 was received
by the F&F Fund.
27. The Funds do not have a legitimate claim to these gains from trades that violated
Rule 105.
28. Upon concluding that it had violated Rule 105, Candlestick Capital did not self-
report the violation to the Commission.  Candlestick Capital also did not conduct a formal review
of its trading history to identify other possible Rule 105 violations, although at the time
Candlestick Capital had participated in a limited number of offerings.  A subsequent review

7

conducted by Candlestick Capital in response to the Commission staff’s investigation in 2022
identified no other Rule 105 violations.
29. In addition, Candlestick Capital did not accurately document the Rule 105
violation in its books and records and only acknowledged the Rule 105 violation after the
Commission staff specifically asked about it during a routine examination of Candlestick Capital
in 2021.
30. Candlestick Capital has since undertaken certain remedial steps, including
updating and revising its Rule 105 policies and procedures to prevent future Rule 105 violations,
including related to the bona fide purchase exception.
FIRST CLAIM FOR RELIEF
Violation of Rule 105 of Regulation M
(against Defendant Candlestick Capital)

31. Paragraphs 1 through 30 above are re-alleged and incorporated by reference as if
fully set forth herein.
32. In connection with an offering of equity securities for cash pursuant to a
registration statement filed under the Securities Act of 1933, Candlestick Capital directed short
sales of securities that were the subject of the offering within the Rule 105 restricted period, and
purchased the offered securities from an underwriter participating in the offering.
33. By reason of the foregoing, Candlestick Capital violated Rule 105 of Regulation
M under the Exchange Act [17 C.F.R. § 242.105].
SECOND CLAIM FOR RELIEF
OTHER EQUITABLE RELIEF
(against Relief Defendants)

34. Paragraphs 1 through 30 above are re-alleged and incorporated by reference as if
fully set forth herein.

8

35. Section 21(d)(5) of the Exchange Act [15 U.S.C. §78u(d)(5)] states “[i] n any
action or proceeding brought or instituted by the Commission under any provision of the
securities laws, the Commission may seek, and any Federal court may grant, any equitable relief
that may be appropriate or necessary for the benefit of investors.”
36. Section 21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)] states “[i]n any
action or proceeding brought by the Commission under any provision of the securities laws,
the Commission may seek, and any Federal court may order, disgorgement.”
37. The Relief Defendants have received gains derived from Candlestick Capital’s
trading in violation of Rule 105 under circumstances dictating that, in equity and good
conscience, they should not be allowed to retain.
38. As a result, the Relief Defendants are liable to disgorge, and should be required to
return, their ill-gotten gains.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
A. Order the Relief Defendants to disgorge, with prejudgment interest, all ill-gotten
gains obtained by reason of the unlawful conduct alleged in the Complaint;
B. Order Defendant Candlestick Capital to pay civil penalties under Section 21(d)(3)
of the Exchange Act [15 U.S.C. §78u(d)(3)];
C. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
D. Grant such other and further relief as this Court may deem just and proper.
JURY DEMAND
The Commission demands a jury in this matter for all claims so triable.

9

DATED: February 17, 2023     Respectfully submitted,
/s/ Richard M. Harper II ________________
Anne F. Hancock (MA Bar No. 691884)
Dawn Edick (DC Bar No. 641659)
Amy Gwiazda (MA Bar No. 663494)
Richard M. Harper II (MA Bar No. 634782)
Martin F. Healey (MA B ar No. 227550)
      SECURITIES AND EXCHANGE COMMISSION
Boston Regional Office
33 Arch St., 24
th
 Floor
Boston, MA 02110
(617) 573-4560 (Hancock direct)
(617) 573 8940 (Edick direct)
(617) 573-8839 (Gwiazda direct)
(617) 573-8979 (Harper direct)
(617) 573-4590 (fax)
[email protected]
 (Hancock email)
[email protected] (Edick email)
[email protected] (Gwiazda email)
[email protected] (Harper email)

Local Counsel:

Michelle McConaghy
Assistant United States Attorney
Chief, Civil Division
United States Attorney’s Office
Connecticut Financial Center
157 Church Street, 25th Floor
New Haven, CT  06510
(203) 821-3700
(203) 773-5373 (Facsimile)

UNITED STATES DISTRICT COURT 
DISTRICT OF CONNECTICUT 

 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
    Plaintiff, 
 v. 
 
CANDLESTICK CAPITAL 
MANAGEMENT LP, 
    Defendant, 
 
and  
 
CANDLESTICK MASTER FUND LP and 
CANDLESTICK US F&F FUND LP, 
 
                                        Relief Defendants. 
 

 
 

Civil Action No.  
 

JURY TRIAL DEMANDED 
 
 

 
COMPLAINT 

 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the 

following against the defendant and relief defendants: 

SUMMARY  

1. This case concerns the violation of Rule 105 of Regulation M under the Securities 

Exchange Act of 1934 (the “Exchange Act”) [17 C.F.R. § 242.105] (“Rule 105”) by Candlestick 

Capital Management LP (“Candlestick Capital”).  Rule 105 is designed to prevent potentially 

manipulative short selling just before the pricing of follow-on and secondary offerings, thereby 

allowing independent market forces to determine the price of those offerings.  Rule 105 prohibits 

any person who makes a short sale of securities, during a defined restricted period before the 

pricing of an offering, from purchasing the same securities in that offering.  Rule 105 prohibits 

such conduct irrespective of the short seller’s intent in effecting the short sale.  

Case 3:23-cv-00206   Document 1   Filed 02/17/23   Page 1 of 9



2 
 

2. Candlestick Capital is the investment adviser to Candlestick Master Fund LP (the 

“Master Fund”) and Candlestick US F&F Fund LP (the “F&F Fund,” and, together with the 

Master Fund, the “Funds” or “Relief Defendants”).   

3. On June 16, 2020, Candlestick Capital sold short common stock of American 

Airlines Group Inc. (“American Airlines”) within Rule 105’s restricted period in the Funds’ 

accounts.  Candlestick Capital then purchased shares of American Airlines common stock for the 

Funds in a follow-on offering from a participating underwriter, without qualifying for an 

exception from the prohibition in Rule 105.  Candlestick Capital’s conduct resulted in ill-gotten 

gains to the Funds of $1,620,398.50.    

4. By virtue of the foregoing conduct and as further alleged herein, Candlestick 

Capital violated Rule 105. 

5. The Commission seeks a final judgment ordering civil money penalties and such 

other relief as the Court may deem appropriate.  

6. The Commission also seeks relief against the Funds, which received the profits of 

Candlestick Capital’s illegal trading and should not be entitled to retain those illegally-derived 

gains.   

JURISDICTION AND VENUE 

7. This Court has jurisdiction over this action pursuant to Sections 21(d) and 27 of 

the Exchange Act [15 U.S.C. §§78u(d) and 78aa]. 

8. Venue lies in this Court pursuant to Section 27 of the Exchange Act [15 U.S.C. 

§78aa].  Certain of the acts, practices, transactions and courses of business alleged in this 

Complaint occurred within the District of Connecticut, and were effected, directly or indirectly, 

by making use of means or instrumentalities of transportation or communication in interstate 

Case 3:23-cv-00206   Document 1   Filed 02/17/23   Page 2 of 9



3 
 

commerce, or the mails.  For example, Candlestick Capital directed all of the securities 

transactions at issue in this case from Connecticut. 

DEFENDANT 

9. Candlestick Capital Management LP is a limited partnership organized under the 

laws of Delaware and located in Greenwich, Connecticut.  Candlestick Capital is registered with 

the Commission as an investment adviser, and advises the Master Fund and F&F Fund, among 

other private fund clients.  Candlestick Capital has represented that, as of October 31, 2022, it 

had approximately $3 billion in assets under management. 

RELIEF DEFENDANTS 

10. Candlestick Master Fund LP is a Cayman Island exempted limited partnership.  

The Master Fund is a private fund client of Candlestick Capital. 

11. Candlestick US F&F Fund LP is a Delaware limited partnership.  The F&F Fund 

is a private fund client of Candlestick Capital.  

OVERVIEW OF RULE 105 

12. Rule 105 makes it unlawful for a person to purchase equity securities from an 

underwriter, broker or dealer participating in a covered public offering if that person sold short 

the security that is the subject of the offering during the restricted period as 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 Exchange Act Form 1-A or 1-E and ending 

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

Case 3:23-cv-00206   Document 1   Filed 02/17/23   Page 3 of 9



4 
 

13. Generally, the offering prices of secondary and follow-on offerings are set at a 

discount to the stock’s closing price just prior to pricing.  

14. 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.   

15. Rule 105 provides an exception for a “bona fide purchase,” which generally does 

not prohibit a person from purchasing securities in an offering even if they sold short during the 

Rule 105 restricted period as long as they purchase the same security in at least the same amount 

as they sold short during the restricted period before the offering is priced.  To qualify as a “bona 

fide purchase,” the restricted period purchase must satisfy the following requirements: (i) the 

purchase is at least equivalent in quantity to the entire amount of the Rule 105 restricted period 

short sale(s); (ii) the purchase is effected during regular trading hours; (iii) the purchase is 

reported to an effective transaction reporting plan (as defined in Rule 600(b)(22) of Regulation 

NMS); (iv) the purchase is effected after the last Rule 105 restricted period short sale, and no 

later than the business day prior to the day of pricing; and (v) the person did not effect a short 

sale that was reported to an effective transaction reporting plan within the 30 minutes prior to the 

close of regular trading hours (as defined in Rule 600(b)(64) of Regulation NMS) on the 

business day prior to the day of pricing.  17 C.F.R. § 242.105(b).  The requirements of the bona 

fide purchase exception are designed to ensure transparency of the activity to the market so that 

the effects of the purchase can be reflected in the security’s market price prior to the pricing of 

the offering.  See 72 Fed. Reg. 45094, 45097.   

Case 3:23-cv-00206   Document 1   Filed 02/17/23   Page 4 of 9



5 
 

FACTS 

16. On Tuesday, June 16, 2020, Candlestick Capital sold short a combined total of 

350,000 shares of American Airlines common stock at an average price of $17.62891 per share 

in the Funds’ accounts.   

17. On Sunday, June 21, 2020, American Airlines filed a preliminary prospectus 

supplement to a shelf registration statement previously filed on February 19, 2020, for a follow-

on offering of its common stock to be priced after the market closed on Monday, June 22, 2020 

(the “Offering”).   

18. On Monday, June 22, 2020, the day the Offering was priced, Candlestick Capital 

recognized that the Funds’ June 16, 2020 short sale of American Airlines common stock fell 

within the restricted period and that the Funds could not participate in the Offering absent a valid 

exception.  Candlestick Capital purchased a combined total of 350,000 shares of American 

Airlines common stock in the Funds’ accounts in the open market, during regular trading hours, 

in a failed attempt to fall within the terms of the bona fide purchase exception to Rule 105. 

19. After the market closed on Monday, June 22, 2020, American Airlines priced the 

Offering at $13.50 per share.   

20. The short sales that Candlestick Capital effected for the Funds occurred within the 

Rule 105 restricted period, which ran from Tuesday, June 16, 2020 through Monday, June 22, 

2020.   

21. For the Funds to meet the requirements of the Rule 105 bona fide purchase 

exception, they would have had to purchase at least 350,000 shares of American Airlines 

common stock in the open market, during regular trading hours, by the market close on Friday, 

June 19, 2020. 

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6 
 

22. Shortly after market close on Monday, June 22, 2020, Candlestick Capital 

submitted an indication of interest to a participating underwriter on behalf of the Funds to 

purchase 750,000 shares in the Offering.  Later that evening, certain Candlestick Capital 

personnel raised concerns that Candlestick Capital may have failed to meet the conditions of the 

Rule 105 bona fide purchase exception.    

23. On Tuesday, June 23, 2020, Candlestick Capital nevertheless received an 

allocation of 750,000 shares in the Offering.  Later that day, Candlestick Capital determined that 

it had failed to meet the bona fide purchase exception and that it violated Rule 105 by purchasing 

shares in the Funds’ accounts to participate in the Offering.  

24. The difference between the price at which the Funds sold short 350,000 shares of 

American Airlines common stock during the restricted period and the price at which the Funds 

purchased 350,000 shares in the Offering was $1,445,118.50.   

25. The Funds also improperly received a benefit of $175,280 by purchasing the 

incremental 400,000 Offering shares at a discount from American Airlines’ market price.   

26. Thus, the Funds received total profits of $1,620,398.50 by participating in the 

Offering, of which $1,565,305.83 was received by the Master Fund and $55,092.67 was received 

by the F&F Fund. 

27. The Funds do not have a legitimate claim to these gains from trades that violated 

Rule 105. 

28. Upon concluding that it had violated Rule 105, Candlestick Capital did not self-

report the violation to the Commission.  Candlestick Capital also did not conduct a formal review 

of its trading history to identify other possible Rule 105 violations, although at the time 

Candlestick Capital had participated in a limited number of offerings.  A subsequent review 

Case 3:23-cv-00206   Document 1   Filed 02/17/23   Page 6 of 9



7 
 

conducted by Candlestick Capital in response to the Commission staff’s investigation in 2022 

identified no other Rule 105 violations.  

29. In addition, Candlestick Capital did not accurately document the Rule 105 

violation in its books and records and only acknowledged the Rule 105 violation after the 

Commission staff specifically asked about it during a routine examination of Candlestick Capital 

in 2021.  

30. Candlestick Capital has since undertaken certain remedial steps, including 

updating and revising its Rule 105 policies and procedures to prevent future Rule 105 violations, 

including related to the bona fide purchase exception. 

FIRST CLAIM FOR RELIEF 
Violation of Rule 105 of Regulation M 

(against Defendant Candlestick Capital) 
 

31. Paragraphs 1 through 30 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

32. In connection with an offering of equity securities for cash pursuant to a 

registration statement filed under the Securities Act of 1933, Candlestick Capital directed short 

sales of securities that were the subject of the offering within the Rule 105 restricted period, and 

purchased the offered securities from an underwriter participating in the offering. 

33. By reason of the foregoing, Candlestick Capital violated Rule 105 of Regulation 

M under the Exchange Act [17 C.F.R. § 242.105].  

SECOND CLAIM FOR RELIEF 
OTHER EQUITABLE RELIEF 

(against Relief Defendants) 
 

34. Paragraphs 1 through 30 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

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8 
 

35. Section 21(d)(5) of the Exchange Act [15 U.S.C. §78u(d)(5)] states “[i]n any 

action or proceeding brought or instituted by the Commission under any provision of the 

securities laws, the Commission may seek, and any Federal court may grant, any equitable relief 

that may be appropriate or necessary for the benefit of investors.” 

36. Section 21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)] states “[i]n any 

action or proceeding brought by the Commission under any provision of the securities laws, 

the Commission may seek, and any Federal court may order, disgorgement.” 

37. The Relief Defendants have received gains derived from Candlestick Capital’s 

trading in violation of Rule 105 under circumstances dictating that, in equity and good 

conscience, they should not be allowed to retain. 

38. As a result, the Relief Defendants are liable to disgorge, and should be required to 

return, their ill-gotten gains.   

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

A. Order the Relief Defendants to disgorge, with prejudgment interest, all ill-gotten 

gains obtained by reason of the unlawful conduct alleged in the Complaint; 

B. Order Defendant Candlestick Capital to pay civil penalties under Section 21(d)(3) 

of the Exchange Act [15 U.S.C. §78u(d)(3)]; 

C. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and  

D. Grant such other and further relief as this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable. 

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9 
 

DATED: February 17, 2023   Respectfully submitted, 

/s/ Richard M. Harper II ________________  
Anne F. Hancock (MA Bar No. 691884) 
Dawn Edick (DC Bar No. 641659) 
Amy Gwiazda (MA Bar No. 663494) 
Richard M. Harper II (MA Bar No. 634782) 
Martin F. Healey (MA Bar No. 227550) 

      SECURITIES AND EXCHANGE COMMISSION 
Boston Regional Office 
33 Arch St., 24th Floor  
Boston, MA 02110 
(617) 573-4560 (Hancock direct) 
(617) 573 8940 (Edick direct) 
(617) 573-8839 (Gwiazda direct) 
(617) 573-8979 (Harper direct) 
(617) 573-4590 (fax) 
[email protected] (Hancock email) 
[email protected] (Edick email) 
[email protected] (Gwiazda email) 
[email protected] (Harper email)  
 
Local Counsel: 
 
Michelle McConaghy 
Assistant United States Attorney 
Chief, Civil Division 
United States Attorney’s Office 
Connecticut Financial Center 
157 Church Street, 25th Floor 
New Haven, CT  06510 
(203) 821-3700 
(203) 773-5373 (Facsimile) 
 

                                            

Case 3:23-cv-00206   Document 1   Filed 02/17/23   Page 9 of 9

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