The SEC's First 2 Naked Short-Selling Settlements

Law360, New York (August 21, 2009, 11:09 AM EDT) -- Two options traders and their broker-dealers charged by the SEC with violating the locate and closeout requirements of Regulation SHO have arrived at a settlement with the SEC. In that action, the SEC also charged a supervisor at one of the firms.

In settling these actions, the SEC for the first time enforced rules designed to prevent so-called abusive “naked” short-selling. The rules, put in place last fall to help settle the turbulent capital markets, were only made permanent on July 27, 2009.

Newly Enforced Rules...
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