SEC v. Vandham Securities Corp. (naked short selling debate, 2019)

Settled

✓ Checked against the primary document on October 2, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

Report an error in this record (sec-vandham-securities-corp-naked-short-selling-debate-2019) by email

In 2019 the Securities and Exchange Commission settled an administrative proceeding with Vandham Securities Corp., finding that between 2016 and 2017 the broker-dealer sold shares of thinly traded, low-priced stocks for other broker-dealers while violating Regulation SHO's locate requirement on thousands of short sales, publishing quotations in breach of Rule 15c2-11, and failing to file suspicious activity reports. It was censured and agreed to a $200,000 civil penalty.

The record

What was ordered

Civil penalty

$200k

Disgorgement

—

Prejudgment interest

—

Total relief

$200k

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

the Securities and Exchange Commission announced this matter on September 16, 2019 as release 34-86970. The respondents named are Vandham Securities Corp. (0 individuals, 1 entity).

The order finds three sets of violations: short sales executed without first locating shares to borrow (Regulation SHO Rule 203(b)(1)), quotations published without the issuer review Rule 15c2-11 requires, and anti-money-laundering failures that included not reporting suspicious liquidations. A boiler-room prosecution of an issuer's CEO and talk of pump-and-dump schemes appear only as red flags in the AML findings; Vandham is not charged with running a boiler room or a pump and dump. This library tags the matter as naked short selling debate.

The conduct is recorded against equities, with OTC identified in the release.

The relief recorded in our data is a civil monetary penalty of $200,000. Penalty and disgorgement are distinct: disgorgement returns the gain, while the penalty is punitive. We store them separately so that aggregate figures across the library are not double-counted.

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. 2019-09-16 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.