SEC Sticking It’s Ding Dong In The Punch Bowl Again
Forget your constitutional right enter into contracts to which you and another party agree. Nope, the SEC can now infringe upon that right because … well … they are government and there are not enough citizen up in arms (literally speaking) yet to stop them:
US regulators will take emergency action to stop abusive short-selling of stock in financial institutions such as mortgage financiers Fannie Mae and Freddie Mac and investment bank Lehman Brothers.
Christopher Cox, Securities and Exchange Commission chairman, told legislators on Tuesday that the agency would issue an emergency rule to stop so-called “naked” short-selling of shares in significant financial entities. The SEC will also consider new rules to extend those trading limits to the rest of the market.
Short sellers aim to profit from share declines – usually by borrowing a stock, selling it and buying it back in the market. But in a “naked” short the shares are sold without being borrowed first. The emergency rule, which would be in effect for up to 30 days, would require anyone making a short sale to borrow the security first.
It would apply to Fannie and Freddie – the government-sponsored entities that own or guarantee almost half of US mortgages – and all primary securities dealers including Lehman, whose shares have been battered by rumours the bank says are false.
Talk about unconstitutional acts! This is just the latest in a long line of unconstitutional acts to come.
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