Economy - Short Selling Stocks Temporarily Banned

The short selling of stocks has been temporarily banned by the S.E.C. The ban affects 799 financial stocks in the midst of the worst crisis on Wall Street in decades. The aim is moved at stopping speculators from betting that the stocks will go down, which adds further pressure to the quickly deflating issues.


"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," said S.E.C. chairman, Christopher Cox in a statement on the S.E.C website. "The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets."

The move by the S.E.C. comes a day after a similar act in Britain.

Short sellers don't own shares in the companies they're speculating will drop. Instead, they "borrow" shares and sell them with the hope of buying them back a lower price.




Source : timesoftheinternet