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SEC Halts Short Selling in 799 Financial Companies

Melissa Klein Aguilar | September 19, 2008

A day after it banned naked short selling, the Securities and Exchange Commission, in concert with the U.K. Financial Services Authority, took temporary emergency action to prohibit short selling in financial companies to shore up investor confidence. The U.K. FSA took similar action yesterday.

The Commission’s action, effective immediately, will apply to the securities of 799 financial companies.

SEC Chairman Christopher Cox said the emergency order “will restore equilibrium to markets.”

“This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury, and the Congress,” Cox said.

The SEC said it will continue to consider measures to address short...

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