The SEC charged Hong Kong investment adviser Snow Lake Capital (HK) Limited) with violations of Rule 105 of Regulation M under the Securities Exchange Act. Snow Lake agreed to pay disgorgement of more than $2 million with interest and a $525,000 penalty in the settled action. The case involved a clear violation of Rule 105 through the purchase, on behalf of private fund and other advisory clients’ accounts, of American Depository Shares (“ADSs”) in five offerings by public companies, after effecting short sales in the ADSs of the same issuers on behalf of one or more of its advisory client accounts during the applicable Rule 105 restricted periods, without meeting the conditions of an exception. It serves as a reminder for private funds managers and other investment advisers to ensure that their policies and procedures include effective controls to prevent both clear and inadvertent Rule 105 violations.