SEC Enhances Investor Protections Against Naked Short Selling

Washington, D.C., July 15, 2008 (LAWFUEL)– The Securities and Exchange Commission today issued an emergency order to enhance investor protections against “naked” short selling in the securities of Fannie Mae, Freddie Mac, and primary dealers at commercial and investment banks.

The SEC’s order will require that anyone effecting a short sale in these securities arrange beforehand to borrow the securities and deliver them at settlement. The order will take effect at 12:01 a.m. ET on Monday, July 21. In addition to this emergency order, the SEC will undertake a rulemaking to address these issues across the entire market.

“The SEC’s mission to protect investors, maintain orderly markets, and promote capital formation is more important now than it has ever been,” said SEC Chairman Christopher Cox. “Today’s Commission action aims to stop unlawful manipulation through ‘naked’ short selling that threatens the stability of financial institutions. We will continue our vigorous commitment to investors by working within the SEC and in close cooperation with our regulatory counterparts to promote the continued health and vibrancy of our markets.”

The Commission’s emergency order, pursuant to its authority under Section 12(k)(2) of the Securities Exchange Act of 1934, will be effective at 12:01 a.m. ET on July 21, 2008 and will terminate at 11:59 p.m. ET on July 29, 2008. The Commission may extend the order to continue it in effect thereafter if the Commission determines that the continuation of the order is necessary in the public interest and for the protection of investors, but for no more than 30 calendar days in total duration.

The securities identified in the Commission’s order:

Company Ticker Symbol

BNP Paribas Securities Corp. BNPQF or BNPQY

Bank of America Corporation BAC

Barclays PLC BCS

Citigroup Inc. C

Credit Suisse Group CS

Daiwa Securities Group Inc. DSECY

Deutsche Bank Group AG DB

Allianz SE AZ

Goldman, Sachs Group Inc GS

Royal Bank ADS RBS


J. P. Morgan Chase & Co. JPM

Lehman Brothers Holdings Inc. LEH

Merrill Lynch & Co., Inc. MER

Mizuho Financial Group, Inc. MFG

Morgan Stanley MS


Freddie Mac FRE

Fannie Mae FNM

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