SEC Extends Order Banning Naked Short Selling
October 6, 2008
On October 1, 2008, the SEC issued an order extending the Emergency Order that prohibits “naked” short selling in financial companies. The Emergency Order became effective September 18, 2008, and was set to terminate on October1, 2008, but, citing the continuing market turmoil and the need to restore equilibrium in the market, the SEC extended the Emergency Order for a period ending at 11:59 p.m. EDT on October 17, 2008. The SEC delegated to each national securities exchange the authority to identify companies that qualify as financial companies to be added to the short sell prohibition list. Financial companies include:
- banks, as defined in 15 U.S.C. 78c(a)(6)
- savings associations, as defined in 15 U.S.C. 78c(a)(46)
- registered brokers or dealers, as defined in 15 U.S.C. 78c(a)(48)
- insurance companies, as defined in 15 U.S.C. 80a-2(a)(17)
- investment advisors, both registered and unregistered
- banks, savings associations, brokers, dealers, insurance companies and investment advisors which are regulated by a foreign regulatory authority
- companies that control or have majority ownership of companies that qualify as one of the above
http://www.sec.gov/rules/other/2008/34-58711.pdf
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