2 Studies: SEC Short-Selling Rule Was Ineffective

Law360, New York (August 14, 2008, 12:00 AM EDT) -- Despite rumors that the U.S. Securities and Exchange Commission may make permanent some provisions of its recently expired emergency order limiting naked short selling of stocks in 19 major financial firms, two recent studies of market data indicate that the rule may have had little impact on the stocks.

Although overall short selling declined in nearly every firm affected by the order, which expired Tuesday, many of the stocks still suffered price declines, the studies show.

The emergency order, which was issued July 15 and took...
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