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SEC approves new restrictions on 'short sellers'

Baltimore Sun

The Securities and Exchange Commission on Wednesday approved new restrictions on "short sellers" - traders who bet stock prices will fall. The SEC, which has been wrestling with the issue for nearly two years, voted 3-2 to limit short sales in any stock that falls 10 percent in one session. At that point, and through the following day, a short sale would be permitted only at a price above the highest price any bidder is offering to pay for the stock. SEC chief Mary Schapiro said in a statement that the new rule reflected the agency's concern that "excessive downward price pressure on individual securities, accompanied by the fear of unconstrained short selling, can destabilize our markets and undermine investor confidence in our markets." The commission has been trying to decide whether - and how - to restrict short sales since the credit crisis mushroomed in 2008. -Tribune Newspapers

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