Limit Short-Selling

In response to the depressed financial markets, regulations, for the second time in less than a week preparing to take steps that could have the effect of temporarily shoring up the prices of shares. But in this process, some critics say could undermine the integrity of the markets. Wednesday, Securities and Exchange Commission plans to announce several proposals to limit permanent traders from making bets that prices will decline shares when prices are already declining. Proposal for restrictions on these so-called short sales follow a campaign of lobbying by financial institutions and other companies that have experienced Sharp declines in the prices of their shares, and their allies in Congress. Short-selling is the practice of borrowing stock and selling it in the hope that their (more…)