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NYSE Regulators Looking Into Short Selling

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Yesterday officials at the group which polices the New York Stock Exchange said they were investigating what may be improper short-selling prior to public stock offerings.
Specifically, the NYSE Regulation officials pointed to the practice of selling short a stock prior to the offering and then covering with stock purchased in the offering. This practice is banned by Rule 105 of Regulation M, according to the regulators who also noted that they did not yet have proof that it had occurred.
This announcement came one week prior to a scheduled Senate judiciary committee on the short selling activities of some analysts and hedge funds.

NYSE concerned about stock offer short-selling