SEC Cracks Down On No Good Very Bad Short Sellers

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The Journal reports that the Securities and Exchange Commission has issued new rules aimed at curbing "a certain type of short-selling." Starting at 12:01 a.m. EDT on Thursday, short sellers and brokers must deliver securities borrowed for short sales on the trade settlement date, three days after the transaction, or face the wrath of Chris Cox. Additionally, the SEC closed the loophole that allowed market-makers to use naked shorting to smooth out temporary trading imbalances (the hole will officially be plugged five days after it is published in the Federal Register). Finally, Cox and Co. passed an anti-fraud rule aimed at short sellers who lie about their ability to deliver borrowed securities.
The full threshhold list of stocks on which the shorting restrictions apply can be found here.

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