5.12.  Regulation M, Rule 105

Among its rules, Rule 105 tries to curb market manipulation that may artificially lower the value of a follow-on or secondary public offering. The rule prohibits investors from purchasing a security from underwriters and other participants in an offering if they shorted the stock during a restricted period. The restricted period is the shorter of the two following periods:

• The period beginning five business days before the pricing of the security and end