SEC v. Biltmore International Corporation (naked short selling debate, 2020)

Settled

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In 2020 the SEC settled an administrative order against Biltmore International Corporation for short sales without a locate under Regulation SHO and for failing to report suspicious activity, with a $125,000 penalty.

The record

What was ordered

Civil penalty

$125k

Disgorgement

—

Prejudgment interest

—

Total relief

$125k

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

On April 24, 2020 the SEC accepted a settlement with Biltmore International Corporation, a broker-dealer that facilitated sales of thinly traded penny stocks for two other broker-dealers. The order finds two violations: from November 2016 to October 2017 Biltmore executed thousands of short sales without locating shares as Regulation SHO Rule 203(b)(1) requires, and it failed to file suspicious activity reports on trading that showed red flags. It imposes a censure and a $125,000 penalty.

Unregistered distributions appear only as red flags in Biltmore's own anti-money-laundering policy and as background on issuers. The order finds no Section 5 violation, so that tag has been removed.

This library tags the matter as naked short selling debate, based on the conduct the document describes. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the release.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• The naked short selling debate — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2020-04-24 Administrative proceeding instituted (cease-and-desist)

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC order

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.