Securities Law
SEC Extends Temporary Short-Selling Ban Until Oct. 17
Posted Oct 2, 2008, 11:23 am CST
By Martha Neil
The Securities and Exchange Commission has extended until Oct. 17 a temporary ban on short-selling the stock of some 800 financial companies.
However, the ban could terminate sooner if Congress enacts planned bailout legislation at an estimated cost to taxpayers of $700 billion or more in the meantime. If so, the short sales prohibition will expire within three days after the legislation is enacted, the Associated Press reports.
More details on the ban and how short-selling works are provided in an earlier ABAJournal.com post. The practice essentially involves a bet that the share price of a particular stock will drop in value.
Related coverage:
Bloomberg: "Short-Selling 'Math Geek' Not Naked, Covered in Blame"
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