A New Jersey-based investment adviser and its managing partner were charged by the Securities and Exchange Commission (SEC) with engaging in a fraudulent short selling scheme involving the stocks of nearly a dozen public companies.
Sabby Management and its principal, Hal Mintz, allegedly generated more than $2 million in illegal profits through violative trading practices, including “naked short selling.” In a naked short sale, a seller does not borrow or arrange to borrow securities in time to make delivery to the buyer within the standard settlement period. Sabby and Mintz utilized the tactic to “artificially deflate the price of securities, allowing them to obtain more shares at a cheaper price,” the SEC said in a press release Monday.
