Monday, July 27, 2009

Naked sellers should cover their assets

The SEC made the right move today by limiting naked short-selling.
In fact, I say the agency didn’t go far enough: It should ban naked short-selling on the public market.
Imagine if everyone at the E-Trade office at Market, Sansome and Sutter— full of windows, mind you — started naked short-selling. One or two naked sellers is bad enough — but a whole office full of them exposing their assets?
If someone wants to naked short-sell in the privacy of his or her own home, go for it. But there’s no way the market should support this kind of behavior.