Naked short selling

Latest Posts

SEC Gets Tough on ‘Naked’ Short Sales

Jul 28, 2009By

The Securities and Exchange Commission (SEC) on Monday made permanent a rule against so-called “naked” short sales in the securities market and detailed some short sale reporting initiatives it said will increase transparency of the practice. In a “naked” short sale, the investor short sells shares it has yet to borrow. The practice, although blamed for pushing down stock prices through speculation alone, was permitted as long as no legal requirement forced short sellers to borrow the shares before selling them short.