SEC Issues Order Affecting Short Sales In Financial

The order, effective July 21, 2008, imposes strict prohibitions on effecting short sales in the shares of specified financial institutions if the short seller has not first borrowed or arranged to borrow the securities being sold short.

As has been widely reported, on Tuesday, July 15, 2008, the U.S. Securities and Exchange Commission (SEC) issued an emergency eight-day order (Order), to become effective on Monday, July 21, and subject to possible extension to up to 30 days, imposing strict prohibitions on effecting short sales in the shares of specified financial institutions if the short seller has not first borrowed or arranged to borrow the securities being sold short. Click here to view the Order. While these prohibitions do not radically differ from requirements already in effect (and that will continue to be in effect) with respect to all stocks, they combine with actions to root out market