Article: Brokers in an Uproar over Utah Law Cracking Down on “Naked Short Selling”

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Brokers in an Uproar over Utah Law Cracking Down on “Naked Short Selling”

Lincoln Journal Star cited by RGM Communications via Wayback, 28 May 2006

A bill approved by the Utah Legislature is causing an angry revolt among Wall Street firms with Utah operations.

The measure cracks down on a stock trading practice defended by some as necessary for orderly markets and assailed by others as easily exploited for stock manipulation.

At issue is short selling, the investors’ practice of borrowing stock and selling it, hoping the share price declines so they can buy cheaper shares, return them to the lender and pocket the difference.

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