Christopher Cox, Securities and Exchange Commission chief, has been coming down hard on short selling and illegal naked short sales since October, and his efforts seem to be paying off, according to the New York Post.
While he has been generating results, he has not been making many fans on Wall Street.
The Nasdaq Stock Market Inc. published a naked-short-selling watch list this week that named 56 stocks, as opposed to nearly 500 listed in September.
Mr. Cox established a penalty to be imposed on traders who do not actually buy or borrow stocks within the three-day requirement before selling them.
The Post reported that Duncan Neiderauer, NYSE Euronext Inc.’s CEO, has criticized Mr. Cox for not acting soon enough or enforcing rules in the first place.
Others have said they believe that the drop in short sales can be attributed to simple economics and a fall in stock prices.
Yesterday, voters in South Dakota rejected an initiative that would require contracts to buy stock before short selling in the state.
The Securities Industry and Financial Markets Association of Washington, which had planned to sue the state if the initiative passed, congratulated South Dakotans on their insightfulness.
SIFMA hopes the results show certain groups that they cannot “exploit state politics in order to influence rules and regulations clearly within the federal realm.”
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