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ARTICLE · 19 SEPTEMBER 2008

UPDATE: SEC Issues New Rules to Combat Naked Short Selling Abuses

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We are writing to update our client alert issued yesterday, September 17, 2008. The prior client alert was based on a press release issued by the Securities and Exchange Commission, which took additional steps after the close of US markets.

United StatesFinance and Banking
Michael Butowsky
Michael Butowsky
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Originally published September 18, 2008

Keywords: Exchange Act Rule, SEC, new rules, combat, naked selling, abuses, emergency order, Regulation SHO, tick test

We are writing to update our client alert issued yesterday, September 17, 2008. The prior client alert was based on a press release issued by the Securities and Exchange Commission, which took additional steps after the close of US markets.

On September 17th, the Securities and Exchange Commission (SEC) issued an emergency order (Emergency Order) under Section 12(k)(2) of the Securities Exchange Act of 1934 (Exchange Act) adopting three new rules designed to combat "naked" short selling (i.e., a short sale where seller does not actually borrow the stock and fails to deliver it in time for settlement).1

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