On December 9, 2011, hedge fund manager Touradji Capital Management, L.P. (Touradji) and the SEC entered into a settlement whereby Touradji consented to an SEC order finding that it violated Rule 105 under Regulation M and imposing remedial sanctions, including disgorgement and civil monetary penalties.  Rule 105 under Regulation M generally prohibits a person from purchasing an issuer’s equity securities in a public offering from an underwriter or broker-dealer participating in the offering if the person has sold short the securities that are the subject of the offering during the five-day period preceding the offering.  The Touradji settlement is the latest in a line of settlements involving hedge fund managers that were found by the SEC to have violated Rule 105 under Regulation M.  For a discussion of other such actions, see “Brookside Settlement Suggests That in Calculating Disgorgement Based on a Rule 105 Violation, the SEC Will Look to the Number of Shares Purchased in a Secondary Offering Rather Than the Number of Shares Sold Short Prior to the Offering,” Hedge Fund Law Report, Vol. 4, No. 22 (Jul. 1, 2011); “Terms of Gartmore Settlement with SEC Suggest that in Calculating Disgorgement for Reg M Violations, SEC Will Use a First-In, First-Out Approach,” Hedge Fund Law Report, Vol. 3, No. 50 (Dec. 29, 2010).