SEC Issues Rules Against Short Sales: ABOUT TIME
New Short Sale Rules issued by the SEC today will go into effect on Thursday.
“These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling,” SEC Chairman Christopher Cox said in a statement.
Brokers failing to comply will be prohibited from further short sales in the same security unless the shares are pre-borrowed. The prohibition on the broker will also apply to all of its customers. (If Scottrade fails to deliver on Sirius, nobody that uses Scottrade to trade would be able to short Sirius.)
[Via Yahoo Biz]
Position: Long SIRI
How much will that limit the gs boys from effectin siri near term? Time to avg down maybe?
GS can make alot of $ shorting their own stock now hahahah!!!!
LOL
Does this mean GS will be unable to keep the stock so low?
GS will be $50 by friday – I hope wienkie has his entire life savings in his own stock !
Newman,
Does this mean GS will be unable to keep the stock so low?
Please respond
Thanks
only if their not borrowing the shares first to short it.They are holding some of the converts so I know those shares are probably shorted
There was a 27 million share covering today at around .84. The sale was not done on the open market because there was no affect on the stock price at that time. We need to find out who that was. It is also apparent it was a naked short covering. I would also like to know who the buyer was.
I don’t own a share of GS and I don’t short them either. But it sure is fun bashing them on the message boards. They deserve it for what they are doing to Sirius.
Is there anywhere we can get an accounting of participation for the converts of July 28th. I know GS has 127.5 Mil of the 300 Mil due in February, but those shares would have been shorted a long time ago when the bonds were purchased. We don’t really know who holds the 187 Mil shares lent for the July bonds until some reporting is done.
I have a feeling that if “Naked” shorting has been holding the price down, which is yet to be proven, it will come to the surface over the next 72 hours. I would think that would create some upward pressure on SP.
The SEC is the joke in all of this. Naked shorting is illegal regardless. Now they act as savior. Little late. Too many large firms in the pockets of the SEC. Especially JPM who helps fund the Federal Treasury. Look who got most of Bear Sterns when the naked short raid took them out. JPM?? You guessed it. If the SEC really cared about the markets and us retail investors the uptick rule would be in full effect and there wouldnt be naked shorting at all in any stock. HEY SEC NAKED SHORTING IS ILLEGAL!!!!
Try Naked shorting a company like McDonalds, it doesn’t work, why… Because they are a solid company.
Siri on the other hand???
91% down since Mel… you do the math.
I agree with Dave. SEC is as fouled up as the FCC which are both better than Bush… the guy who made this mess.
hey plowboy, fcc and bush in the same sentence?
the dems. voted against the merger.
want another topic?
home loans to people who cant afford them,fannie,freddy,backed by dems.,chris cox etc.=finanical crisis!
want another topic?
if your long sirixm, good chance you’ll make a big chunk of money.
with obamas policy on capital gains,your big chunk of money will be much less.
when obama says he wants your vote ,he really means he wants your wallet.
Guess what….nothing has changed. Naked shorting is continuing. UBS Frank Cashen this morning basically said if you read between the lines the new rules will not be enforced.
Two years of democratic controlled congress has put us in this economic collapse. It was the democrats who pushed mortgages for everyone at ANY cost.
You are amazing if you are that short-sighted. I financial system is so complicated with everything going on, i.e. interest rates, derivatives, earnings, debt and on and on. To blame a political party after only having control for 2 years and by maybe 2 more reps than the republicans is a very ignorant statement to make in my opinion. Get your facts straight.
And by the way, his name is Art Cashen, not Frank.
These are the kind of people that we have investing in Sirius. I would describe them as the uninformed gambler. And as long as these “weak hands” continue to invest and then subsequently sell we will continue to see prices sag. If we can get some more institutional money in this thing for the long haul it is only then that we will see the climb in SP.
Chairman and CEO Patrick M. Byrne comments on the SEC’s September 17, 2008 press release (see . that purports to protect investors against naked short selling.
Dr. Byrne commented, “At the core of the SEC announcement is a decision that if a hedge fund naked shorts a stock, its broker isn’t supposed to let them naked short again. But guess what: they were not supposed to naked short in the first place. Instead of giving the buyer who receives the fail the right to put it back to the naked short selling participant, the SEC once again opts for nerf penalties for financial rapists.
“If the SEC were anything but a hedge fund bootlick,” continued Byrne, “it would not have taken the half-measure of a pre-borrow requirement applied only as a penalty for those failing to deliver within T+3, but would have instituted a market-wide pre-borrow requirement (as it did in its July 15, 2008 Emergency Order protecting Upper Caste financial firms), and mandatory buy-ins at T+3.
“Some questions for the SEC:
1. How will the SEC determine whether an institution is in compliance with this rule? The only way to determine compliance is through an SEC audit, something that could only occur months after the fact. In the case of a bear raid, that will be too late.
2. Where is the ‘buy-in’ requirement? Under the new SEC rules a crooked hedge fund can still naked short sell without settlement and keep that short open indefinitely. It appears that only future naked short sales will require a pre-borrow and that there is still no closeout requirement for failed trades.
3. What of manipulative day trading? Chairman Cox has admitted that the financial stocks did not have a significant level of naked shorts, but rather collapsed under day trading activities. The new rule fails to address this, the very activity that generated the need for the July 15, 2008 emergency order. The manipulative day trading short seller never has a position open for three days. However, under the new rules, he can still use a single locate multiple times to create the best leverage possible to drive natural investors out of the market.
4. Where are the penalties? Without meaningful penalties, these rules have no bite. The SEC needs to make sure that the rules are strictly and aggressively enforced — both for failures to deliver that occur within the CNS system and outside the CNS system in ex-clearing trades, where, I suspect, there is naked shorting that makes the object of current SEC concerns look like small potatoes.
“Rule 10b-21, the short selling anti-fraud rule, is a carefully contrived joke. It moves from a low-penalty too-vague-to-enforce rule, to a high-penalty too-vague-to-enforce rule. Without strict and aggressive SEC enforcement (for which the SEC has zero demonstrated record) it will be just more lines of meaningless pabulum in the Federal Register.
“On the bright side, the SEC has eliminated a major loophole in Regulation SHO, the options market maker exception. There was never a good reason why options market makers should have been allowed to naked short and fail to deliver in perpetuity. For taking this long overdue action, I applaud the SEC.
“What is needed is a Congressional investigation into the abortion that is our nation’s stock settlement system, focusing especially on the DTCC. A healthy next step would be to unplug the SEC and move its functions into the DOJ.”
I think this is what ART Cashen wanted to say this morning but did not have the time to say it.
Dougetit?
The blame for this economic collapse and the more than doubling of gas prices rests solely on the laps of the democrats.
McCain has it right…..He would have fired Cox.
……………and the naked shorting continues.
The doubling in gas prices is related to the increase in oil which is related to the decline in the dollar which has decreased in value from $121 in July 2001 to $70.70 in March 2008. I guess this the democrats fault. Do you get it?
GIS, while the full in the dollar is part of the reason for oil going up the main reason is China and India taking a bigger part of the supply. The short term cure is to get more supply out there. Democrats (mainly their base) care more about animals, then people. While we need to do more in the long run, then just drill. For now, that is the answer until new forms of energy can be developed. The fact is the democrats have been the main people that have caused the price increase in oil.
I agree that China and India have definitely added to the demand. The worlds output has for the most part kept up with this demand in all of my research. I believe that the oil price being pegged (marked) to the dollar is what affects the price of oil more but your opinion is appreciated.
Go Sirius.
GIS, look at your own post about were the dollar was pegged in 2001 from that we can say that the dollar droped about 40 % to the Euro (not the Yen which is less). Take the price of oil in 2001 and it has more then quadrupled when it was at 147 a few weeks ago. The reason it came down was because the government started to get serious about drilling in the United States. It started to drop after Bush repealed the executive order on drilling then went down again when it look like congress was going to finally get something done on this. What do we get from the democrats a false bill that was ment to fail. They dont let the states get any revenue from it, so why would they allow them to drill, which is required. Then the main oil that is available off shore is still unavailable because the oil companies can not drill in the 50 miles were most of it is. It is like the 68,000 acres the democrats talk about, the oil companies now have leases on. The problem is there is no oil on most of it and the rest were there is they are being held up in red tape.
That’s all fine and dandy but the price of oil wouldn’t be impacted by drilling off shore for many, many years. To think that the price of oil dropped because Bush repealed the order is a little short sighted in my opinion. Yeah maybe it got some of the crazy speculators out of the market that were pumping it up at any cost but working off a true supply/demand basis this doesn’t hold much weight.
That is untrue if they are able to drill within the first 50 miles it would be about 2 years out. Second speculators are projecting the future supply/price of oil and do not hold on to oil contracts if they know more supply is coming down the pike.