China Confidential
Wednesday, September 17, 2008
SEC Cracks Down on Naked Shorts
Dateline USA....
Good news for the United States, bad news for the offshore hedge fund operators and investors who have unfairly influenced and battered the share prices of US publicly traded companies.
The Securities and Exchange Commission today took several coordinated actions to strengthen investor protections against "naked" short selling. The Commission's actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.
"These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling," said SEC Chairman Christopher Cox. "The Enforcement Division, the Office of Compliance Inspections and Examinations, and the Division of Trading and Markets will now have these weapons in their arsenal in their continuing battle to stop unlawful manipulation."
In an ordinary short sale, the short seller borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price). But in an abusive naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling conditions.
Today's Commission actions, which are the result of rulemaking under the Administrative Procedure Act, go beyond its previously issued emergency order, which was limited to the securities of financial firms with access to the Federal Reserve's Primary Dealer Credit Facility. Because the agency's exercise of its emergency authority is limited to 30 days, the previous order under Section 12(k)(2) of the Securities Exchange Act of 1934 expired on Aug. 12, 2008.
The Commission's actions were as follows:
Hard T+3 Close-Out Requirement; Penalties for Violation Include
Prohibition of Further Short Sales, Mandatory Pre-Borrow
The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.
If a short sale violates this close-out requirement, then any broker-dealer acting on the short seller's behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer's activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.
Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.
Exception for Options Market Makers from Short Selling
Close-Out Provisions in Reg SHO Repealed
The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(b)(3) in Regulation SHO. This rule change also becomes effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.
As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling.
Rule 10b-21 Short Selling Anti-Fraud Rule
The Commission adopted Rule 10b-21, which expressly targets fraudulent short selling transactions. The new rule covers short sellers who deceive broker-dealers or any other market participants. Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This rule also becomes effective at 12:01 a.m. ET on Thursday.
Obama is The Most Un-American Candidate
Like putting lipstick on a pig....
No matter how hard the mainstream media try to normalize Barack Hussein Obama--even Bill O'Reilly "looked into his eyes" and assured Fox News viewers that Obama is "no wimp"--they can't change the fact that he is the most un-American candidate ever to win the Democratic nomination for President of the United States. Next to BHO, George McGovern and Jimmy Carter look like regular guys.
Whereas McGovern and Carter were influenced by radicals, Obama is a radical--a closet, Third World-style socialist, driven by dreams from
*his Communist-leaning, Kenyan father, Barack Hussein Obama, Sr., who, while working as a Nairobi bureaucrat, argued for eliminating private farming and nationalizing businesses "owned by Asians and Europeans" and massive taxes on the rich to "redistribute our economic gains to the benefit of all;"
*his childhood Communist mentor, Frank Marshall Davis, an American Communist Party member, identified only as "Frank" in Obama's memoir; and
*a crypto-Communist, Saul Alinsky, the father of community organizing as a cover for revolutionary change. whose ideas, methods, and tactics--"rules for radicals," as he put it in his how-to book of the same title--Obama has used so effectively throughout his political career and Presidential campaign.
Obama would change America, alright: he would bury it. His wealth transfer/taxation policies would deepen and prolong the recession and probably plunge the economy into a depression; and his oppressive community service plan would create a vast federal bureaucracy and allow for the drafting and indoctrination of millions of young Americans for a never-ending crusade for "social justice"--code for class warfare and class envy. Obama's anti-energy program would leave massive oil and gas and coal reserves in the ground, forever end the possible exploitation of shale oil, and put nuclear power on permanent hold, resulting in a greater dependence on foreign oil. Fraudulent, manmade climate change/carbon credit and taxation schemes would cripple American industry, impoverish millions of ordinary Americans, and create a bonanza of trading riches for a handful of investment banking firms already preparing for the next big bubble--the global buying, selling and leveraging of hot air (Obama's specialty, when you stop to think about it). His anti-gun campaign would attack the Constitutional right to bear arms in order to bring about the disarming of the American civilian population--in line with United Nations proposals.
In contrast with un-American Obama, John McCain will defend the Constitution and put America--not the UN--first. Like a modern-day Teddy Roosevelt, McCain will lead the charge for re-industrialization and reform of the financial services industry. Unlike Obama, who sees the government as the source of all wealth, McCain understands that a country is only as strong as its productive capacity. President Obama, like a well trained community organizer, would fight for "programs." President McCain will put America back to work, manufacturing, mining, drilling.
It should be the McCain mantra: manufacturing, mining, drilling.Tuesday, September 16, 2008
Wednesday, 17 September 2008
Dateline USA....
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