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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

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Nov 3 4:00 PM EST

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To: elmatador who wrote (35857)	6/18/2008 2:25:17 AM
From: Haim R. Branisteanu	Read Replies (2) of 217536

FSA angered by Deutsche Bank's 'crass' short selling advice By Philip Aldrick Last Updated: 11:44pm BST 17/06/2008 Deutsche Bank has been privately scolded by the Financial Services Authority for advising clients to short rights issues at Britain's embattled banks to cash in on a collapse in their shares. The note to clients from its equity trading desk is understood to have infuriated the regulator and been one of the catalysts for its sudden clampdown last week on short-selling during rights issues, on which it provided more detail yesterday. Deutsche drew up the client advice shortly after Royal Bank of Scotland and HBOS launched their respective £12bn and £4bn rights issues in April. In the document, it recommends "buying the rights and shorting the stock, hoping the stock trades through the rights price". Buying the rights "would provide a hedge to losses from the short". Although the action proposed is not illegal, bankers described it as "crass". Last Wednesday, short-sellers successfully pushed HBOS below the 275p rights price. The FSA promptly intervened, drafting a change in the rules so that all short positions in rights issues of 0.25pc or more have to be revealed. telegraph.co.uk

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