Scoggin Management Lp

Allegations: ON JUNE 27, 2014, THE FINANCIAL SUPERVISORY AUTHORITY OF NORWAY ("FSA") ISSUED A DECISION OF SURRENDER OF GAIN (THE "DECISION") AGAINST SCOGGIN CAPITAL MANAGEMENT II LLC AND SCOGGIN INTERNATIONAL FUND LTD, TWO PRIVATE INVESTMENT FUNDS ("FUNDS"), MANAGED BY REGISTRANT FOR VIOLATING THE SHORT SALE PROHIBITION OF SECTION 3-14 OF THE NORWEGIAN SECURITIES TRADING ACT WHICH REQUIRES A SHORT SELLER OF FINANCIAL INSTRUMENTS ("SECURITIES") TO ENSURE TIMELY DELIVERY OF SUCH SECURITIES ON THE TRADE SETTLEMENT DATE. THE DECISION FINDS THAT IN AUGUST 2013 THE FUNDS SOLD SHORT SHARES OF NORTHLAND RESOURCES S.A. ("NAUR") WITHOUT BEING ABLE TO DELIVER THE NAUR SHARES ON THE TRADE SETTLEMENT DATE. AT THE TIME THE FUNDS SHORT SOLD THE NAUR SHARES, REGISTRANT BELIEVED THAT THE FUNDS WOULD BE ABLE TO ENSURE TIMELY DELIVERY OF THE NAUR SHARES BY THE TRADE SETTLEMENT DATE. HOWEVER, THE FUNDS WERE ONLY ABLE TO SECURE ACCESS TO THE NAUR SHARES ONE DAY AFTER THE TRADE SETTLEMENT DATE. IN A RELATED ACTION, AN ADVISORY AFFILIATE OF OLD BELLOWS PARTNERS L.P., AN AFFILIATE OF REGISTRANT, WAS ALSO ASKED TO SURRENDER GAINS DUE TO THIS TRANSACTION. PLEASE SEE THE FORM ADV OF OLD BELLOWS PARTNERS L.P. FOR INFORMATION ABOUT THAT ACTION. Status: Final Sanction Detail: THE FUNDS WERE ORDERED TO DISGORGE A PORTION OF THE GAINS THEY OBTAINED BY SELLING THE NAUR SHARES ONE DAY TOO EARLY. THE FSA CALCULATED SUCH GAINS AS THE PRICE DIFFERENCE BETWEEN THE FUNDS' ACTUAL SALE PRICE FOR THE NAUR SHARES AND THE ESTIMATED HYPOTHETICAL SALE PRICE FOR THE SAME NUMBER OF SHARES ONE DAY LATER. BASED ON THAT CALCULATION, THE FSA ORDERED SCOGGIN CAPITAL MANAGEMENT II LLC TO DISGORGE NOK 1,897,129 WHICH EQUALED USD $309,934 ON THE DATE THE DECISION WAS ACCEPTED AND SCOGGIN INTERNATIONAL FUND LTD TO DISGORGE NOK 1,528,448 WHICH EQUALED USD $249,703 ON THE DATE THE DECISION WAS ACCEPTED. Summary: ON JULY 24,2014, THE FUNDS ACCEPTED THE DECISION TO DISGORGE THE GAINS ORDERED BY THE FSA. THE AMOUNT ORDERED TO BE DISGORGED BY SCOGGIN CAPITAL MANAGEMENT II LLC IS NOK 1,897,129 WHICH EQUALED USD $309,934 ON THE DATE THE DECISION WAS ACCEPTED AND THE AMOUNT ORDERED TO BE DISGORGED BY SCOGGIN INTERNATIONAL FUND LTD IS NOK 1,528,448 WHICH EQUALED USD $249,703 ON THE DATE THE DECISION WAS ACCEPTED.