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SEC proposes tougher "naked" short selling rules
Securities |
2008/03/05 08:53
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| The U.S. Securities and Exchange Commission on Tuesday proposed tougher rules to curb so-called "naked" short-selling abuses and prevent market price manipulation. SEC Chairman Christopher Cox said regulation SHO, an existing rule partly aimed at short selling abuses, "needs teeth." Short sellers borrow shares they consider overvalued and sell them. If the price drops, they repurchase the shares, return them and pocket the difference. In a naked short sale, the investor sells stock that has not yet been borrowed. The three-member SEC voted unanimously to propose the rule, which targets sellers who intentionally deceive broker-dealers or purchasers about their ability to meet delivery deadlines. Sellers sometimes deliberately fail to deliver securities as part of a scheme to manipulate the stock price. The SEC is seeking public comment on its proposal. |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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