SEC Chair Mary Schapiro, in a February 24, 2010 speech, said the rule "is designed to preserve investor confidence and promote market efficiency, recognizing short selling
can potentially have both a beneficial and harmful impact on the market.
It also clarifies ASIC's policy for granting relief to allow naked short selling
in some circumstances.
net, available to the company to help us fight the naked short selling
is the practice of borrowing stock then selling it in hopes that the price will go down and it can be bought back at a lower price, thereby generating a profit and allowing one to return like shares for the borrowed ones.
The Company intends to vigorously pursue, with the assistance of regulatory agencies, stock exchanges and its industrial relations advisors, more definitive information on short selling
practices and their possible impact on share performance.
James Brigagliano, assistant director of market regulation at the SEC, said, "While there may be instances of abusive short selling
, 99% of all trades in dollar value settle on time without incident.
Naked short selling
, or naked shorting, is an illegal practice of selling shares that have not been affirmatively determined to exist.
Manipulative naked short selling
by broker-dealers operates as a fraud on the market causing investors to lose confidence in the fairness and legitimacy of OTC markets," Cromwell wrote in his petition.
While short selling
may have its place in fair market practices," said PRRM President Dan Burgess, "naked short selling
undermines the market's ability to justly and accurately reflect the price of equity securities, untowardly affecting issuers and investors alike.
The Depository Trust & Clearing Corporation (DTCC) has provided its bank and broker customers with a detailed explanation of its Stock Borrow program and the issue of naked short selling
in an effort counter a widespread campaign of distortions and misleading information.
The list, maintained by NASD, is updated daily and includes securities with excessive certificate delivery failures most commonly associated with the illegal practice of "Naked Short Selling
Company Advises Shareholders to Request Physical Delivery of Stock to Help Combat Naked Short Selling