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SEC Takes Aggressive Action to Control Short Selling and the Spread of False Rumors |
July 30, 2008
Previously published on July 2008
In rapid succession over a three-day period, the Securities and Exchange Commission ("SEC") has taken drastic measures to protect investors and stabilize U.S. markets by issuing an emergency order limiting "naked" short selling, by issuing 50 subpoenas to hedge funds to obtain documents concerning market manipulation through the spread of false rumors in Bear Stearns' and Lehman Brothers' securities, and by announcing that the SEC would immediately conduct industry "sweep" examinations of broker-dealers and investment advisors to determine whether they had adequate supervisory and compliance controls and training to prevent the spread of false information intended to cause market manipulation.
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The views expressed in this article are solely the views of the author and not Martindale-Hubbell. This article is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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