Proposed SEC Rule Targets ABS Conflicts Of Interest

Law360, New York (September 19, 2011, 3:46 PM EDT) -- The U.S. Securities and Exchange Commission voted unanimously Monday to propose a rule that would bar firms that assemble and sell asset-backed securities from immediately betting against those same securities once they were sold to investors.

Under the proposal, which was mandated by the Dodd-Frank financial overhaul, firms would have to wait until one year after selling an asset-backed security before they could short it. The rule would also prevent third parties from helping to package an asset-backed security and then turning around and betting that...
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