Rule 105 of Regulation M under the Securities Exchange Act of 1934 makes it unlawful for a person to purchase securities in a public offering if that person has sold those securities short within a specified period prior to the pricing of the offering. In a recently settled enforcement proceeding, the SEC alleged that an investment adviser violated Rule 105 on multiple occasions. What is most interesting about the settlement is that the adviser’s automated trade monitoring systems flagged the suspect transactions both before and after the firm purchased securities in the public offerings, but its compliance staff approved the purchases because they miscalculated the period during which purchases were prohibited. This enforcement action is a critical reminder that even the best compliance systems are only as good as the people who interpret and act on the reports generated by those systems. It also illustrates the potential benefits of self-reporting and cooperation with the SEC. This article details the alleged violations, the adviser’s remedial actions and the terms of the resolution. For discussion of short sale reporting requirements, see “SEC’s Proposed Short Sale Rules Increase Transparency Into Large Short Positions” (Mar. 31, 2022); and “SEC Sanctions Unregistered Fund Adviser for Regulation SHO Violations: (Sep. 30, 2021).