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VideoArticle: The impact of naked short selling on the securities lending and equity market
Article - AcademicThe impact of naked short selling on the securities lending and equity market
Steven Lecce, Andrew Lepone, Michael D. McKenzie, Reuben Segara
Journal of Financial Markets, 1 February 2012
This paper examines the impact of naked short selling on equity markets where it is restricted to securities on an approved list. Consistent with Miller’s (1977) intuition, stocks with the highest dispersion of opinions and short sale constraints are the only stocks to exhibit significant and negative abnormal returns in the post-event period. We also find slightly higher stock return volatility and a small reduction in liquidity when naked short sales are allowed. Overall, it impairs market quality (liquidity and volatility), although there appears to be some improvement in price efficiency in stocks with high short sale constraints.
Article: Hydrogenics Awarded Contract by Us Hybrid Corporation Todeliver Five Hypm(Tm)Hd Series Power Modules for Heavyduty Mobility.
Article - Media, PublicationsGlobeNewswire , 27 January 2012
Hydrogenics Corporation, a leading developer and manufacturer of hydrogen generation and fuel cell products, today announced that the Company has received orders, for the delivery of five new generation HyPM(TM)HD Series Fuel Cell Power Modules from US Hybrid of Torrance, California. US Hybrid specializes in the design and manufacture of power conversion systems for medium and heavy duty electric, hybrid and fuel cell commercial buses and trucks. The power modules will be used in a dump truck, a step van and several buses. The vehicles are part of a government funded program managed by the High Technology Development Corporation’s Hawaii Center for Advanced Transportation Technologies and will be deployed for a variety of end users in Hawaii. Continue reading “Article: Hydrogenics Awarded Contract by Us Hybrid Corporation Todeliver Five Hypm(Tm)Hd Series Power Modules for Heavyduty Mobility.”
Article: Credit Suisse Fined $1.75M for Short-Selling System Failures
Article - Media, PublicationsCredit Suisse Fined $1.75M for Short-Selling System Failures
Financial Planning, 28 December 2011
Credit Suisse Securities has been fined $1.75 million by the Financial Industry Regulatory Authority for failing to properly supervise short-selling activity.
From June 1, 2006 through December 2010, Credit Suisse Securities failed to comply with the locate and marking requirements of Regulation SHO as well as FINRA rules, NASD rules and federal securities laws, according to FINRA.
Specifically, FINRA fined Credit Suisse for Reg SHO violations and for failing to properly supervise short sales and the marking of sale orders. As a result, the financial services firm entered millions of short sales without reasonable grounds to believe that the securities could be borrowed and delivered and mismarked thousands of sales orders, FINRA charges. Continue reading “Article: Credit Suisse Fined $1.75M for Short-Selling System Failures”
Article: Credit Suisse Fined $1.75 Million for Breaking ‘Naked’ Short-Selling Rules
Article - Media, PublicationsCredit Suisse Fined $1.75 Million for Breaking ‘Naked’ Short-Selling Rules
Eleazar David Meléndez, 27 December 2011
The Financial Industry Regulatory Authority (FINRA) said Monday it was fining the American brokerage unit of Swiss banking giant Credit Suisse $1.75 million for violating rules regarding the controversial market-making practice known as “naked” short-selling.
Credit Suisse Securities (USA) LLC was being fined for violating Regulation SHO, a rule enacted in early 2005 by the Securities Exchange Commission to target prevent market participants from abusing short-selling, according to a statement from the regulatory group,
In a short sale, a market maker sells a security it does not own, later borrowing the instrument from a third-party in order to make good on its transaction. If the price of that security goes down, the short-seller can later buy it back in the open market, returning it to the party from which it borrowed in the first place, and pocketing the difference in prices as profit. Continue reading “Article: Credit Suisse Fined $1.75 Million for Breaking ‘Naked’ Short-Selling Rules”
Article: Credit Suisse Rapped for U.S. Lapses
Article - Media, PublicationsCredit Suisse Rapped for U.S. Lapses
finews asia, 24 December 2011
Credit Suisse was hit with a $6.5 million fine for doing too little to prevent potential market manipulation by U.S. clients.
The Swiss bank was slammed by U.S. industry officials for and fined $6.5 million for failing to keep an eye on major U.S. institutional clients, Finra, or the Financial Industry Regulatory Authority, said in a statement. Credit Suisse said it is «pleased to have resolved these matters with FINRA and these exchanges,» according to a brokerage industry publication
Specifically, the Zurich-based lender granted clients – brokers and other institutional-sized clients – direct access to exchanges without proper oversight. Credit Suisse won more than $300 million in revenue from trading more than 300 billion securities – a move that sparked more than 50,000 alerts at Finra, which is a U.S. broker self-regulatory body. Continue reading “Article: Credit Suisse Rapped for U.S. Lapses”
Filing: FINRA v Credit Suisse
FilingFINRA v Credit Suisse
13 December 2011
Pursuant to FINRA Rule 9216 of FINRA’s Code of Procedure, the Respondent submits this Letter of Acceptance, Waiver and Consent (“AWC”) for the purpose of proposing a settlement of the alleged rule violations described below. This AWC is submitted on the condition that, if accepted, FINRA will not bring any future actions against the Respondent alleging violations based on the same factual findings described herein.
PDF (22 pages): FINRA v Credit Suisse
Article: SEC backs investors’ claim Merrill rigged ARS market, lawyer says
Article - Media, PublicationsSEC backs investors’ claim Merrill rigged ARS market, lawyer says
jgoff, 08 December 2011
Auction-rate securities holders seeking to win back part of the $330 billion they’ve invested, may get help from a U.S. Securities and Exchange Commission legal brief supporting claims that Merrill Lynch & Co. rigged the moribund market, a lawyer involved in the case said. Continue reading “Article: SEC backs investors’ claim Merrill rigged ARS market, lawyer says”
Article: Merrill Lynch fined for violating cotton-speculation limits
Article - MediaMerrill Lynch fined for violating cotton-speculation limits
Kevin G. Hall
McClatchy Newspapers, 7 December 2011
A key financial regulator said Wednesday that it had fined Wall Street powerhouse Merrill Lynch $350,000 for violating rules that limit how many speculative contracts it can hold in markets where bets are made on the price of cotton for future delivery.
The Commodity Futures Trading Commission said that Merrill Lynch Commodities Inc., a subsidiary of Bank of America, repeatedly had violated limits on how many Cotton No. 2 futures contracts it was allowed to hold. Futures are bets on where the price of a given commodity will be for future delivery.
Filing: SEC v Citigroup
FilingSEC v Citigroup
28 November 2011
On October 19, 2011, the U.S. Securities and Exchange Commission
(the “S.E.C.”) filed this lawsuit, accusing defendant Citigroup
Global Markets Inc. (“Citigroup”) of a substantial securities fraud.
According to the S.E.C.’s Complaint, after Citigroup realized in
early 2007 that the market for mortgage-backed securities was
beginning to weaken, Citigroup created a billion-dollar Fund (known
as “Class V Funding III”) that allowed it to dump some dubious assets
on misinformed investors.
PDF (15 pages): SEC v Citigroup
Article: German regulator issues naked short-selling ban
Article - MediaGerman regulator issues naked short-selling ban
NDTV, 25 November 2011
Germany’s market regulator announced a ban on Tuesday on so-called naked short-selling of eurozone government debt and shares of major financial companies, a move that came as European officials seek to strengthen control of markets.
Article: Financial Finger-Pointing Turns to Regulators
Article - MediaFinancial Finger-Pointing Turns to Regulators
Louise Story, Gretchen Morgenson
New York Times, 22 November 2011
In the whodunit of the financial crisis, Wall Street executives have pointed the blame at all kinds of parties — consumers who lied on their mortgage applications, investors who demanded access to risky mortgage bonds, and policy makers who kept interest rates low and failed to predict a housing market collapse.
But a new defense has been mounted by a bank executive: my regulator told me to do it.
Article: European Bailout Fund For Greek Money Laundering And Fraud
Article - Media, PublicationsEuropean Bailout Fund For Greek Money Laundering And Fraud
Wolf Richter, 18 November 2011
The ink wasn’t even dry yet on the European bailout fund, the EFSF when it paid $1.3 billion to bail out Proton Bank in Greece. Turns out, Proton had siphoned off $1 billion in a scheme of fraud, embezzlement, money laundering, and offshore front companies, according to the Süddeutsche Zeitung. And then a bomb exploded.
The bomb, fabricated of dynamite, demolished four cars in front of a building in Halandri, a suburb of Athens. Not a coincidence: in the building lived a senior employee of the Bank of Greece, whose meticulous investigation of Proton Bank had exposed the massive criminal scheme. According to the police, the bomb was intended as a warning to those who attempt to shed light on these kinds of machinations. Continue reading “Article: European Bailout Fund For Greek Money Laundering And Fraud”
Article: Overstock.com CEO Dr. Patrick M. Byrne Named Ernst & Young National Entrepreneur of the Year® 2011 Retail and Consumer Products Award Winner
Article - Media, PublicationsPRNewswire, 16 November 2011
Overstock.com, Inc. (NASDAQ: OSTK), today announced that its CEO and Chairman Dr. Patrick M. Byrne, was named the Ernst & Young National Entrepreneur Of The Year® 2011 Retail and Consumer Products Award winner. He was honored at the Entrepreneur of the Year Awards gala, the culminating event of the Ernst & Young Strategic Growth Forum® held in Palm Springs, California on November 12, 2011. Continue reading “Article: Overstock.com CEO Dr. Patrick M. Byrne Named Ernst & Young National Entrepreneur of the Year® 2011 Retail and Consumer Products Award Winner”
Article: UBS will pay $12M over naked shorts
Article - Media, PublicationsUBS will pay $12M over naked shorts
dcubberley, 27 October 2011
UBS AG, Switzerland’s biggest bank, will pay $12 million to resolve Financial Industry Regulatory Authority claims that a brokerage unit allowed millions of short-sale orders to be placed without reasonable grounds to believe that the securities could be delivered. Continue reading “Article: UBS will pay $12M over naked shorts”
