Tuesday, July 15, 2008
The SEC announced emergency action to curb short-selling in the stock of Fannie Mae and Freddie Mac, as well as the securities firms (Lehman, Goldman Sachs, Merrill Lynch, Morgan Stanley), in effect for 30 days. Brokers will be required to pre-borrow stocks before short sales, and the lending broker will not be permitted to let other brokers use the stock for their short sales. Chairman Cox said the SEC will undertake a rulemaking to address the broader issues of short-selling. WSJ, SEC Curbs Shorting of GSE Stocks, Considers Limits for Wider Market.