Rule 105 of Regulation M (Rule 105 or Rule) under the Securities Exchange Act of 1934 prohibits a person that has sold an issuer’s securities short within a specified period (Restricted Period) prior to a follow‑on or secondary offering of those securities from purchasing securities in the offering. The SEC has been vigilant in taking action against alleged Rule violations. In that regard, it settled separate proceedings against two private fund advisers, both of which sold short in a pre‑offering restricted period and then purchased shares in the offering. The settlements are notable because, although the charges were limited to violation of Rule 105, the SEC complaints suggest the agency considered the defendants’ compliance efforts to be sub-par in regard to the Rule. This article details the SEC’s allegations and the terms of the settlements. See “SEC Alleges Short Selling Violations by Firm Whose Compliance Staff Misinterpreted Rule 105” (Jul. 28, 2022); and “SEC’s Proposed Short Sale Rules Increase Transparency Into Large Short Positions” (Mar. 31, 2022).