In re ANTIPODEAN ADVISORS
summary
Antipodean Advisors LLC violated Rule 105 of Regulation M by short-selling J.C. Penney shares during the restricted period before purchasing 100,000 shares in its follow-on offering, earning $27,970 in illicit profits, and subsequently agreed to a cease-and-desist order and $93,672.83 in total penalties without admitting guilt.
paragraph
Antipodean Advisors LLC, a New York-based SEC-registered investment adviser with over $1.14 billion in assets under management, violated Rule 105 of Regulation M by selling short 152,000 shares of J.C. Penney Co. Inc. during the restricted period in August 2013 and then purchasing 100,000 shares in the company’s follow-on offering at a lower price, generating $27,970 in illicit profits. The SEC found this conduct unlawful regardless of intent, as Rule 105 prohibits such short-sale-and-purchase cycles to prevent market manipulation. Without admitting or denying the findings, Antipodean consented to a cease-and-desist order and agreed to pay $27,970 in disgorgement, $702.83 in prejudgment interest, and a $65,000 civil penalty, totaling $93,672.83.
narrative
Antipodean Advisors LLC, a New York-based registered investment adviser with over $1.14 billion in assets under management, violated Rule 105 of Regulation M under the Securities Exchange Act of 1934 by selling short 152,000 shares of J.C. Penney Co. Inc. during the restricted period from August 22, 2013, and then purchasing 100,000 shares in JCP’s follow-on offering priced at $12.90 on August 27, 2013. The difference between the proceeds from the short sale and the purchase price yielded $27,970 in illicit profits, constituting a clear breach of Rule 105’s prophylactic prohibition against short-selling a security before acquiring it in a public offering. The SEC emphasized that Rule 105 applies irrespective of intent, aiming to preserve market integrity by preventing manipulative trading patterns. Antipodean consented to a cease-and-desist order without admitting or denying the findings, but acknowledged the SEC’s jurisdiction and cooperated fully with the investigation. As part of its settlement, Antipodean agreed to disgorge $27,970 in profits, pay $702.83 in prejudgment interest, and a $65,000 civil penalty, totaling $93,672.83. The Commission also noted Antipodean’s prompt remedial actions and cooperation as mitigating factors in determining the penalty. The order requires payment to be sent to the SEC’s Division of Enforcement at 100 F Street, N.E., Washington, DC, as directed by Assistant Secretary Jill M. Peterson.
Classified market-manipulation(confidence 100%). EDGAR detection: forms SC 13D/G/13F· recall 53% / precision 9%. detection rule →
Statutes
31 U.S.C. 371717 C.F.R. § 242.10517 C.F.R. § 242.105(a)SECTION 21C OF THE SECURITIES EXCHANGE ACT
Parties
advisory servicesantipodean advisors llclimited liability corporationoffering sharessame securitySecurities and Exchange Commission
Keywords
antipodeancommissionsecurities exchangerespondentexchangeantipodean advisorsrestricted periodsecuritiesorderofferingproceedingsshortpursuantadvisorsexchange commission
Extracted insights
Dollar amounts 6
- $1.14B $1.14 billion ≥$1B
- $1.00M $1,000,000 $1M–$10M
- $94K $93,672 $10K–$100K
- $65K $65,000 $10K–$100K
- $28K $27,970 $10K–$100K
- $703 $702.83 <$10K
Entities 6
- person advisory services
- company antipodean advisors llc
- company limited liability corporation
- person offering shares
- person same security
- agency Securities and Exchange Commission
Triples 12
- Securities and Exchange Commission instituted cease-and-desist proceedings
- Antipodean Advisors LLC submitted Offer of Settlement
- Securities and Exchange Commission accepted Offer of Settlement
- Antipodean Advisors LLC consents entry of Order
- Antipodean Advisors LLC violated Rule 105 of Regulation M
- Antipodean Advisors LLC bought offering shares
- Antipodean Advisors LLC sold short same security
- Antipodean Advisors LLC resulted in profits of $27,970
- Antipodean Advisors LLC is limited liability corporation
- Antipodean Advisors LLC registered with SEC
- Antipodean Advisors LLC provides advisory services
- Antipodean Advisors LLC has total assets under management in excess of $1.14 billion
Text layers
Extracted body text (8,214c)
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 73115 / September 16, 2014
ADMINISTRATIVE PROCEEDING
File No. 3-16119
In the Matter of
ANTIPODEAN ADVISORS
LLC
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 Antipodean Advisors LLC (“Antipodean” 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 Antipodean, a New York-based registered investment adviser. 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. In August 2013, Antipodean 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. This violation resulted in profits of $27,970.
Respondent
3. Antipodean Advisors LLC is a limited liability corporation incorporated in
Delaware with its principal place of business in New York, New York. Antipodean Advisors
LLC has been registered with the SEC since September 2010. Antipodean Advisors LLC
provides advisory services to one domestic fund and has total assets under management in excess
of $1.14 billion.
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).
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.
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
Antipodean’s Violation of Rule 105 of Regulation M
6. On August 22, 2013, Antipodean sold short 152,000 shares of J.C. Penney Co. Inc.
(“JCP”) during the restricted period at a price of $13.1797 per share. On August 27, 2013, JCP
announced the pricing of a follow-on offering of its common stock at $12.90 per share.
Antipodean received an allocation of 100,000 shares in that offering. The difference between
Antipodean’s proceeds from the restricted period short sales of JCP shares and the price paid for
the 100,000 shares received in the offering was $27,970. Thus, Antipodean’s participation in the
JCP offering resulted in total profits of $27,970.
7. In total, Antipodean’s violations of Rule 105 resulted in profits of $27,970.
Violation
8. As a result of the conduct described above, Antipodean violated Rule 105 of
Regulation M under the Exchange Act.
Antipodean’s Remedial Efforts & Cooperation
9. 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 Antipodean’s Offer.
Accordingly, it is hereby ORDERED that:
A. Pursuant to Section 21C of the Exchange Act, Respondent Antipodean cease and
desist from committing or causing any violations and any future violations of Rule 105 of
Regulation M of the Exchange Act;
B. Antipodean shall within fourteen (14) days of the entry of this Order, pay
disgorgement of $27,970, prejudgment interest of $702.83, and a civil money penalty in the
amount of $65,000 (for a total of $93,672.83) to the United States Treasury. 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
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.
4
(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
Antipodean 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, Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E.,
Washington, DC 20549.
By the Commission.
Jill M. Peterson
Assistant Secretary
OCR text (7,626c · tika · 95% conf)
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 73115 / September 16, 2014
ADMINISTRATIVE PROCEEDING
File No. 3-16119
In the Matter of
ANTIPODEAN ADVISORS
LLC
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 Antipodean Advisors LLC (“Antipodean” 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 Antipodean, a New York-based registered investment adviser. 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. In August 2013, Antipodean 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. This violation resulted in profits of $27,970.
Respondent
3. Antipodean Advisors LLC is a limited liability corporation incorporated in
Delaware with its principal place of business in New York, New York. Antipodean Advisors
LLC has been registered with the SEC since September 2010. Antipodean Advisors LLC
provides advisory services to one domestic fund and has total assets under management in excess
of $1.14 billion.
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).
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.
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
Antipodean’s Violation of Rule 105 of Regulation M
6. On August 22, 2013, Antipodean sold short 152,000 shares of J.C. Penney Co. Inc.
(“JCP”) during the restricted period at a price of $13.1797 per share. On August 27, 2013, JCP
announced the pricing of a follow-on offering of its common stock at $12.90 per share.
Antipodean received an allocation of 100,000 shares in that offering. The difference between
Antipodean’s proceeds from the restricted period short sales of JCP shares and the price paid for
the 100,000 shares received in the offering was $27,970. Thus, Antipodean’s participation in the
JCP offering resulted in total profits of $27,970.
7. In total, Antipodean’s violations of Rule 105 resulted in profits of $27,970.
Violation
8. As a result of the conduct described above, Antipodean violated Rule 105 of
Regulation M under the Exchange Act.
Antipodean’s Remedial Efforts & Cooperation
9. 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 Antipodean’s Offer.
Accordingly, it is hereby ORDERED that:
A. Pursuant to Section 21C of the Exchange Act, Respondent Antipodean cease and
desist from committing or causing any violations and any future violations of Rule 105 of
Regulation M of the Exchange Act;
B. Antipodean shall within fourteen (14) days of the entry of this Order, pay
disgorgement of $27,970, prejudgment interest of $702.83, and a civil money penalty in the
amount of $65,000 (for a total of $93,672.83) to the United States Treasury. 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 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.
4
(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
Antipodean 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, Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E.,
Washington, DC 20549.
By the Commission.
Jill M. Peterson
Assistant Secretary