Naked Shorting-Hedge Fund & Market Maker manipulation? Message Board

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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?

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From: pcyhuang	7/17/2008 9:06:04 AM
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My Reflection on the SEC's New Rule on Abusive Shorting The Wall Street Journal reports: SEC Chairman Christopher Cox said the SEC would institute an emergency order requiring any traders to pre-borrow stock before shorting Fannie Mae and Freddie Mac, the embattled government-sponsored entities that own or back more than half the nation's mortgages. It would also apply to the stocks of Lehman Brothers, Goldman Sachs, Merrill Lynch and Morgan Stanley. The order is a near-term fix and will expire in 30 days. Comment: Please note that, besides the GSE, the list of firms included under this new rule are all licensed primary dealers in U.S. government securities. These firms conduct auctions and distribute U.S. Treasury securities. I think, therefore, the primary objective of the SEC's new rule is to protect this net work, making sure that none of these firms would fail. Protection of the individual investors against market manipulation and buying phantom securities seems to be at best, a secondary objective. Cheers,

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