2014-09-16 SEC Press pdf 92 KB 8,096 chars

In re IRONMAN CAPITAL

Exhibit of SEC Sanctions 19 Firms and Individual Trader for Short Selling Violations in Advance of Stock Offerings

summary

Ironman Capital Management, LLC violated Rule 105 of Regulation M by short-selling 9,100 shares of Gulfport Energy Corporation during a restricted period and buying 4,000 shares in its follow-on offering, illegally profiting $21,844, and agreed to a settlement requiring disgorgement, interest, and a $65,000 civil penalty.

paragraph

Ironman Capital Management, LLC, a Houston-based registered investment adviser, violated Rule 105 of Regulation M by selling short 9,100 shares of Gulfport Energy Corporation (GPOR) during the restricted period and purchasing 4,000 shares in its follow-on offering priced at $56.75, generating $21,844 in illicit profits. The SEC found the violation occurred regardless of intent, as Rule 105 is a prophylactic rule designed to prevent market manipulation in public offerings. As part of a settlement, Ironman agreed to disgorge $21,844 in profits, pay $382.66 in prejudgment interest, and a $65,000 civil penalty, while ceasing and desisting from future violations.

narrative

Ironman Capital Management, LLC, a Houston-based registered investment adviser with over $78 million in assets under management, violated Rule 105 of Regulation M by selling short 9,100 shares of Gulfport Energy Corporation (GPOR) during the restricted period, which began five business days before the pricing of a follow-on offering. On November 6, 2013, GPOR priced its offering at $56.75 per share, and Ironman Capital subsequently purchased 4,000 shares from the offering, realizing $21,844 in profits from the price differential between its short sale at $62.21 and the offering price. Rule 105 prohibits such conduct irrespective of intent, as it undermines market integrity by allowing short sellers to artificially depress prices before buying into public offerings. The SEC accepted Ironman’s offer of settlement without admitting or denying the findings, but acknowledged jurisdiction and the factual basis of the violation. As part of the resolution, Ironman was ordered to disgorge $21,844 in illicit profits, pay $382.66 in prejudgment interest, and a $65,000 civil penalty, totaling $87,226.66. Ironman also agreed to cease and desist from any future violations of Rule 105, and the SEC noted its cooperation and remedial efforts as mitigating factors in determining the penalty.

Enriched metadata

Scheme: market-manipulation (100%)
Outcome: settled
Disgorgement: $21,844
Civil penalty: $87,227

Classified market-manipulation(confidence 100%). EDGAR detection: forms SC 13D/G/13F· recall 53% / precision 9%. detection rule →

Extracted insights

Dollar amounts 6

$78.00M $78 million $10M–$100M
$1.00M $1,000,000 $1M–$10M
$87K $87,226 $10K–$100K
$65K $65,000 $10K–$100K
$22K $21,844 $10K–$100K
$383 $382.66 <$10K

Entities 3

company ironman capital management, llc
agency Securities and Exchange Commission
agency the securities and exchange commission for over a decade

Triples 9

Ironman Capital Management, LLC violated Rule 105 of Regulation M of the Securities Exchange Act of 1934
Ironman Capital Management, LLC is organized under the laws of Texas
Ironman Capital Management, LLC has principal place of business in Houston
Ironman Capital Management, LLC has been registered with the Securities and Exchange Commission for over a decade
Ironman Capital Management, LLC has assets under management of $78 million
Ironman Capital Management, LLC bought offering shares in November 2013
Ironman Capital Management, LLC generated profits of $21,844
SEC instituted cease-and-desist proceedings against Ironman Capital Management, LLC
Rule 105 violation resulted in profits of $21,844

PDF

In re IRONMAN CAPITAL · Source

Text layers

Extracted body text (8,096c)

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 73122 / September 16, 2014

ADMINISTRATIVE PROCEEDING
File No. 3-16126

In the Matter of

IRONMAN CAPITAL
MANAGEMENT, 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

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 Ironman Capital Management, LLC (“Ironman
Capital” 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.

III.

On the basis of this Order and Respondent’s Offer, the Commission finds
1
that:

Summary

1. These proceedings arise out of a violation of Rule 105 of Regulation M of the
Exchange Act by Ironman Capital, a Houston-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 November 2013, Ironman Capital 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 restricted period. This violation resulted in profits of $21,844.

Respondent

3. Ironman Capital Management, LLC is a limited liability company organized
under the laws of Texas with its principal place of business in Houston. Ironman Capital has
been registered with the Commission for over a decade and has over $78 million in assets under
management.
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.

Ironman Capital’s Violation of Rule 105 of Regulation M

6. On November 6, 2013, Ironman Capital sold short 9,100 shares of Gulfport Energy
Corporation (“GPOR”) during the restricted period at a price of $62.21 per share. On November 6,
2013, GPOR priced a follow-on offering of its common stock at $56.75 per share. Ironman Capital
received an allocation of 4,000 shares in that offering. The difference between Ironman Capital’s
proceeds received from the restricted period short sales of GPOR shares and the price paid for the
4,000 shares received in the offering was $21,844. Thus, Ironman Capital’s participation in the
2013 GPOR offering resulted in total profits of $21,844.

Violations

7. As a result of the conduct described above, Ironman Capital violated Rule 105 of
Regulation M under the Exchange Act.

Ironman Capital’s Remedial Efforts & Cooperation
8. 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 Ironman Capital’s Offer.

Accordingly, it is hereby ORDERED that:

A. Pursuant to Section 21C of the Exchange Act, Respondent Ironman Capital cease
and desist from committing or causing any violations and any future violations of Rule 105 of
Regulation M of the Exchange Act;

B. Ironman Capital shall within fourteen (14) days of the entry of this Order, pay
disgorgement of $21,844, prejudgment interest of $382.66, and a civil money penalty in the
amount of $65,000 (for a total of $87,226.66) 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.

(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
Ironman Capital 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 (7,535c · tika · 95% conf)

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 73122 / September 16, 2014

ADMINISTRATIVE PROCEEDING
File No. 3-16126

In the Matter of

IRONMAN CAPITAL
MANAGEMENT, 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

II.

III.

On the basis of this Order and Respondent’s Offer, the Commission finds1 that:

Summary

1. These proceedings arise out of a violation of Rule 105 of Regulation M of the

Exchange Act by Ironman Capital, a Houston-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 November 2013, Ironman Capital 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 restricted period. This violation resulted in profits of $21,844.

Respondent

Legal Framework

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.

Ironman Capital’s Violation of Rule 105 of Regulation M

6. On November 6, 2013, Ironman Capital sold short 9,100 shares of Gulfport Energy

Corporation (“GPOR”) during the restricted period at a price of $62.21 per share. On November 6,
2013, GPOR priced a follow-on offering of its common stock at $56.75 per share. Ironman Capital
received an allocation of 4,000 shares in that offering. The difference between Ironman Capital’s
proceeds received from the restricted period short sales of GPOR shares and the price paid for the
4,000 shares received in the offering was $21,844. Thus, Ironman Capital’s participation in the
2013 GPOR offering resulted in total profits of $21,844.

Violations

7. As a result of the conduct described above, Ironman Capital violated Rule 105 of
Regulation M under the Exchange Act.

Ironman Capital’s Remedial Efforts & Cooperation

8. 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 Ironman Capital’s Offer.

Accordingly, it is hereby ORDERED that:

(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.

(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

By the Commission.

Jill M. Peterson
Assistant Secretary