SEC v. Wilson-Davis & Company, Inc. (naked short selling debate, 2016)

Settled

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In December 2016 the SEC instituted proceedings against Utah broker-dealer Wilson-Davis & Company over short sales that relied on the market-maker exception to the locate requirement and over its market access controls. On April 26, 2017 the Commission accepted the firm's settlement offer: a censure, a cease-and-desist order, $208,645.71 in disgorgement, $27,068.79 in interest and a $75,000 penalty.

The record

What was ordered

Civil penalty

$75k

Disgorgement

$209k

Prejudgment interest

$27.1k

Total relief

$311k

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 order instituting proceedings, issued December 16, 2016, alleges that from November 2011 to May 2013 the firm relied on the bona fide market-making exception to the locate requirement for proprietary short sales that were not market making, and that it breached the market access rule. These are allegations.

Outcome. A later Commission order, dated April 26, 2017, records that the firm submitted an offer of settlement and neither admitted nor denied the findings, other than jurisdiction. The order finds that the firm willfully violated Regulation SHO's locate-or-borrow rule over that period, and willfully violated the market access rule in 2012 to 2014 by lacking adequate pre-trade controls, a review system and the required CEO certifications. It censures the firm, orders it to cease and desist, and requires payment of disgorgement, prejudgment interest and a civil penalty, with the balance payable in installments over a year.

What the source does not show: this order covers the firm only. Related proceedings against individuals at the firm exist, and we did not check or record their outcomes here.

This library tags the matter as naked short selling debate because the document describes short sales made without a valid locate under a market-maker exception the firm could not rely on. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

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. 2016-12-16 Administrative proceeding instituted (cease-and-desist)
2. 2017-04-26 Commission order accepts Wilson-Davis settlement: censure, cease-and-desist, disgorgement, interest and penalty

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
• SEC settled order (April 26, 2017)

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.

Same matter

The library links these 2 records because they appear to concern one matter: the same lead defendant, an overlapping technique tag and close filing dates, or a shared court docket or a release that cites the other. Records are listed by date filed.

This grouping is the library's, made by matching names, techniques, dates and citations when the site is built. It is not the regulator's or a court's determination that the records are one case, and it errs towards missing a link rather than making a false one.

Related actions

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

Record added September 10, 2026. submit a correction.