Fans of enemies of naked shorting, rejoice. Settlement (no admission of guilt, innocence, neutrality, etc.) for the first enforcement actions brought for the vile enemies of all Christian civilization is at hand.
Hazan and the company were accused of betting that share prices would fall without borrowing and delivering the shares, the SEC said in a statement today. Regulations adopted in July require brokers to identify a source of the shares prior to a short sale and to deliver the securities by a certain date. The SEC also barred Hazan from working with any brokerage.
And just in case you thought these sorts of things didn’t travel in pairs:
In a separate case, the SEC settled similar claims against TJM Proprietary Trading LLC, ordering payment of $541,000 in disgorgement. The suit named trader Michael Benson and Chief Operating Officer John Burke, who will pay $250,000 in fines together with the company.
Maybe it is just us, but when the first actions against the practice involve cases with “complex options transactions,” you are simply trying too hard.
Hazan Capital Settles SEC’s First Claims of ‘Naked’ Short Sales [Bloomberg]
‘Maybe it is just us, but when the first actions against the practice involve cases with “complex options transactions,” you are simply trying too hard.’
So you think regulators should worry more about cases where the negative effects of naked shorting would not cause subsequent liquidations of other positions (ripple effects) than those that would?
If a guy is naked short stock on a standalone basis, clearing chews him out and he has to buy stock, sucks but all that’s effected is the stock which is pretty liquid.
Say he’s long a call and hedging with naked short stock. Now he has to buy back his stock and sell his calls into a market where no one wants to buy them since they can’t short stock. See why this situation is more concerning?
‘Maybe it is just us, but when the first actions against the practice involve cases with “complex options transactions,” you are simply trying too hard.’
So you think regulators should worry more about cases where the negative effects of naked shorting would not cause subsequent liquidations of other positions (ripple effects) than those that would?
If a guy is naked short stock on a standalone basis, clearing chews him out and he has to buy stock, sucks but all that’s effected is the stock which is pretty liquid.
Say he’s long a call and hedging with naked short stock. Now he has to buy back his stock and sell his calls into a market where no one wants to buy them since they can’t short stock. See why this situation is more concerning?
It’s about time. This may help curb an especially pernicious form of self fulfilling market speculation that makes money while driving stock prices down.