SEC Cracks Down on Naked Shorting

The Securities and Exchange Commission issued three rules today to strengthen investor protections against “naked” short selling. The rules take effect at 12:01 a.m. on Thursday, September 18.
A short sale occurs when a short seller essentially borrows a stock and sells it with the understanding that the loan must be repaid by buying the stock in the market at a later date and hopefully at a lower price.
Naked short selling is the practice of selling a stock short without first borrowing the shares or ensuring that the shares can be borrowed as is done in a conventional short sale.



0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.