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ARTICLE · 30 JULY 2008

SEC Issues Emergency Order Suspending "Naked" Short Selling

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On July 15, 2008, the Securities and Exchange Commission (SEC) issued an emergency order (the "Emergency Order") prohibiting anyone from engaging in the "naked" short selling of the securities of Fannie Mae, Freddie Mac and seventeen other financial firms identified in Appendix A to the Emergency Order (the "Appendix A Securities").

United StatesFinance and Banking
Michael Butowsky
Michael Butowsky
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Originally published July 24, 2008

Keywords: SEC, naked short selling, Fannie Mae, Freddie Mac, Rule 10b-21

On July 15, 2008, the Securities and Exchange Commission (SEC) issued an emergency order (the "Emergency Order") prohibiting anyone from engaging in the "naked" short selling of the securities of Fannie Mae, Freddie Mac and seventeen other financial firms identified in Appendix A to the Emergency Order (the "Appendix A Securities").1 The Emergency Order is in effect between 12:01 a.m. ET, Monday, July 21, 2008, and 11:59 p.m. ET, Thursday, July 29, 2008, and can be extended by the SEC for up to 21 additional days. During this period, no one may effect a short sale in the Appendix A Securities unless they have those securities in inventory available to borrow, or they or their agent have borrowed, or arranged to borrow, the securities, and the securities are delivered on the settlement

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