The money manager will pay US$2.25-million over activities from the fall of 2018
Anson Advisors Inc. will pay US$2.25-million after U.S. securities regulators sanctioned and fined the Toronto money manager for failing to tell its investors how it was working with activist short sellers.
In 2018, Anson paid an unnamed short-selling publisher US$1.1-million after trading on reports about two different stocks: Canadian Securities Exchange-listed Namaste Technologies Inc. and NYSE-listed India Globalization Capital Inc. He said both of the companies Anson shorted “were ultimately found to be engaging in deceptive business practices, and Anson’s involvement not only benefitted our own investors but also the broader market by exposing these bad actors.” The two stocks are down nearly 100 per cent from fall 2018 prices, he noted.
Activist short sellers are deeply controversial, particularly in Canada. Opponents of the practice call it “short and distort,” with many alleging that short sellers are defaming targeted companies with multiple inaccuracies. Short sellers who announce their position, then close it out quickly when the stock falls, are said to “smash and grab.”
“Short selling plays an important role in the financial markets by promoting transparency and contributing to liquidity and price discovery, and thus contributing to market integrity and investor protection,” CSA and CIRO wrote in their November 2023 summary of the feedback they’d received.
Seller Sec Report Anson Namaste Activist Sellers CSA Securities And Exchange Commission SEC
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