SEC rules applicable to short selling are intended to prevent abusive trading practices. The SEC commenced a civil enforcement action against a hedge fund adviser and its principal for engaging in naked short sales, mismarking trades and making other misrepresentations to executing broker-dealers in a fraudulent scheme to profit from trading in the securities of at least ten issuers. This marks the second time the SEC has charged this adviser with improper short sale practices. This article details the SEC’s allegations. See “First Circuit Upholds SEC Injunction Against Short‑Selling Priest” (Jun. 8, 2023).