Subject: David J. Stone

Subject of Interest

David J. Stone is a partner of the Bragar Eagel & Squire, P.C. law firm.  He graduated from  Boston University School of Law, in 1994. He is an Editor, of Law Review. His bar admissions include: New York, California, U.S. Courts of Appeals for the Second Circuit, Third Circuit and Ninth Circuit, U.S. District Courts for the Southern and Eastern Districts of New York, U.S. District Courts for the Northern, Central and Southern Districts of California. Stone is a member of the Legal Advisory Counsel, Sanctuary for Families. 


Bragar Eagel & Squire, P.C.


Paper: Market Manipulation and Directors Fiduciary Duty of Care


Market Manipulation and Directors Fiduciary Duty of Care

Market manipulation of emerging or small cap companies is pervaasive on Wall Street and according to the SEC has increased over 37% in the last decade. The nature and scope of market manipulation schemes is limited only by the creativity and audacity of their perpetrators.  While the substance and mechanics of market manipulation schemes may differ, the objective is the same – to inject false information into the marketplace that artificially affects the price of the  target companies securities by “interfering with the natural interplay of the forces of supply and demand.” The proliferation of market manipulation scshemes has created challenging risk-management and best practice issues for the directors of targeted companies, which require directors to continuously assess the nature and scope of their fiduciary duty of care.

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Paper: Fails to Deliver: The Price Impact of Naked Short Sales


Fails to Deliver: The Price Impact of Naked Short Sales

Elizabeth Stone

Stanford University, 27 September 2010

The effect of naked short selling on asset prices and trading dynamics is a prominent topic of debate among market participants, regulators, and the popular press. This paper evaluates the validity of the claim that naked shorting leads to negative excess returns by creating additional selling pressure. While data on naked short sales is not publicly available, Securities Exchange Commission data on failures to deliver is a strong proxy. Fail to deliver data for 2004 covers a period during which the prevalence of naked short selling was not public knowledge since neither the fail to deliver data nor the Regulation SHO List were publicly available. In excluding information and regulation effects, the analysis presented in this paper isolates potential microstructure price effects.

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