SEC Sues Traders Over Alleged Short-Sale Scheme

Law360, New York (November 20, 2008, 12:00 AM EST) -- The U.S. Securities and Exchange Commission has sued two day traders who allegedly perpetrated a $2.4 million manipulative short-selling scheme at a now defunct broker-dealer in violation of a former short-sale rule implemented by the SEC.

In a complaint filed Wednesday in the U.S. District Court for the Southern District of New York, the SEC charged Robert Todd Beardsley and George Lindenberg, former day traders at Redwood Trading LLC, of violating the “uptick rule,” a former short-sale rule that forbids short sales while a stock price...
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