SEC Halts Short Selling of Financial Companies
19 September 2008
Mayer Brown Article
19 September 2008 - On September 18th, the Securities and Exchange Commission (SEC) issued three emergency orders under Section 12(k)(2) of the Securities Exchange Act of 1934 (Exchange Act) aimed at preventing the “substantial disruption of the securities markets” and stemming the use of short sales to drive down the share prices of certain issuers even where there is no fundamental basis for such price drops. These emergency orders follow on the heels of similar actions taken by the UK Financial Services Authority.