Article: SEC reins in ‘naked’ short selling, will check recent trades

Article - Media

SEC reins in ‘naked’ short selling, will check recent trades

Adam Shell

abc, 18 September 2008

Reacting to concerns that many financial stocks were losing value at an alarming rate due to aggressive bets by short sellers who profit when prices fall, federal regulators on Wednesday acted to stem the abusive practice known as “naked short selling.”

In an ordinary short sale, a short seller borrows stock and sells it, with the hope of buying it back later at a lower price to replace the borrowed shares.

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Release: SEC Issues New Rules to Protect Investors Against Naked Short Selling Abuses

Release

SEC Issues New Rules to Protect Investors Against Naked Short Selling Abuses

SEC, 17 September 2008

he Securities and Exchange Commission today took several coordinated actions to strengthen investor protections against “naked” short selling. The Commission’s actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.

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Article: SEC’s ban on short-selling Fannie, Freddie ends

Article - Media

SEC’s ban on short-selling Fannie, Freddie ends

Marcy Gordon

New York Times, 13 August 2008

A government order expires Tuesday that temporarily banned a certain kind of short-selling of the stocks of mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE) and 17 large investment banks.

The companies’ shares have stabilized since the ban took effect July 21. The Securities and Exchange Commission says its order helped prevent stock manipulation, and that regulators will be able to analyze data to gauge its effectiveness. But some experts say that may be difficult to determine.

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Article: Swatting an Imaginary Fly

Article - Media

Swatting an Imaginary Fly

Thomas G. Donlan

Barrons, 28 July 2008

The stock market was a safer place last week and the financial system was somewhat less endangered. How do we know? The Securities and Exchange Commission ordained it.

“The SEC’s mission to protect investors, maintain orderly markets and promote capital formation is more important now than it has ever been,” Chairman Christopher Cox declared on July 15, as the commission took action to “stop unlawful manipulation through ‘naked’ short-selling that threatens the stability of financial institutions.”

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Notice: Public Statement by SEC Chairman Naked Short Selling Is One Problem a Slumping Market Shouldn’t Have

Notice

Public Statement by SEC Chairman:
Naked Short Selling Is One Problem a Slumping Market Shouldn’t Have

Chairman Christopher Cox

SEC.gov, 18 July 2008

The demise of IndyMac, coming on the heels of Bear Stearns’ desperate sale to JPMorgan Chase, is a sure sign of the fragility of today’s markets. What’s needed now, more than ever, is reliable information for investors and confidence that trading can be conducted without the illegal influence of manipulation.

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Web: Cox: “Many people think naked short selling is already illegal, but that isn’t true….”

Web

Cox: “Many people think naked short selling is already illegal, but that isn’t true….”

Bob O’Brien

Sanity Check via Wayback, 17 July 2008

Remarkably, or perhaps not so remarkably, literally hours after issuing an emergency order requiring short sellers to actually borrow the stock they sell – but only in the large financial companies largely complicit in causing hundreds of billions of dollars of damage to the financial markets via naked short selling – several interesting things happened. If you read my last blog, you’ll see I saw it coming. Loopholes, poor craftsmanship, silliness, dishonesty, all baked into the SEC cake so that the proclamation has little real world effect.

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Article: Naked Short Selling — Illegal but Hard to Prove

Article - Media

Naked Short Selling — Illegal but Hard to Prove

Gregg Greenberg

TheStreet, 16 July 2008

The Securities and Exchange Commission Chairman Christopher Cox on Tuesday said the regulator planned to crack down on naked short-selling of Fannie Mae (FNM) and Freddie Mac. Cox said in a testimony to the Senate Banking Committee on Tuesday that the agency will require short-sellers to borrow shares of the two government-sponsored mortgage giants and broker dealers including Lehman Brothers (LEH) , Goldman Sachs (GS) – Get Report, Merrill Lynch (MER) and Morgan Stanley (MS) – Get Report before selling them. The new restrictions are called for under a temporary emergency order that expires in 30 days.

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Article: SEC proposes tougher “naked” short selling rules

Article - Media

SEC proposes tougher “naked” short selling rules

Rachelle Younglai, Richard Chang

Reuters, 4 March 2008

The U.S. Securities and Exchange Commission on Tuesday proposed tougher rules to curb so-called “naked” short-selling abuses and prevent market price manipulation.

SEC Chairman Christopher Cox said regulation SHO, an existing rule partly aimed at short selling abuses, “needs teeth.”

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