Document accidentally released by lawyer shows naked short-selling by investment banks

May 17, 2012 by · Leave a Comment
Filed under: Legal News 

Matt Taibbi is right that god rarely shines down on us in these matters.   I wonder how that lawyer is doing right now?   Has he resigned or is he sprucing up his resume?

I am not even going to try to give too many remarks on this.   Mr. Taibbi and the Economist has done excellent work in this regard and I will instead link to each article respectably.   If you want to read the actual release yourself, click here, pages 14-20 are what both articles are referring too.

Bottom-line is that naked-short selling is illegal, has to stop now and the people who have done this need to be put into jail, this will teach them and others a lesson about the rule of law and why we have them.   Making bets on declining stocks is fine but you need to first secure them, creating them out of thin area outside of the normal supply and demand model is plain old fraud, pure and simple.

Rolling Stone’s Article (Matt Taibbi)

Economist’s Article

SEC issues new rules against abusive short sales

September 17, 2008 by · Leave a Comment
Filed under: Legal News 

I am glad to see they are applying these rules to all companies not just a hand-picked bunch of financial and GSE’s. Abusive naked short selling has been effecting many companies over the years while the SEC had rules on the books about this but the enforced never came so it gave these short-sellers a “green light” to use these manipulative techniques.

Reuters Release:

New rules aimed against abusive naked short selling of stock in all publicly traded companies were issued by the U.S. Securities and Exchange Commission on Wednesday.

The SEC’s new rules, which include a requirement to deliver a security by the settlement date, are effective on Thursday.

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SEC short-sale rule ending, market move being debated

August 10, 2008 by · Leave a Comment
Filed under: Economic News 

It was very interesting to see this rule that has been on the books for some time and now they decide to enforce it when naked short selling happens on the GSEs or investment banks.  What made this so odd is that the offenders of using naked short selling they are almost the same crowd this rule is being used to protect.   The real question that should be asked is “who are the naked short sellers?”, but it looks like no one is really asking that question.


Short trading in 19 major U.S. financial stocks will revert to rules governing other shares on Wednesday as a Securities and Exchange Commission experiment against abusive short selling expires.

Market data company S3 Matching Technologies says short sales in the affected companies dropped after the emergency rule took effect but there is little consensus on how the market will react come Wednesday.

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