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09-05-2023, 09:44 AM
May 9, 2023 8:02 AM GMT+8
By Carolina Mandl, David French and Svea Herbst-Bayliss
NEW YORK, May 4 (Reuters) - The practice of short selling is coming under increased scrutiny as shares of regional banks remain under pressure, with some calls for more regulatory oversight of the practice.
Short sellers, who borrow shares they expect to fall and hope to repay the loan for less later to pocket the difference, have profited from the banking crisis. They gained US$1.2 billion in the first two days of May
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Wachtell, Lipton, Rosen & Katz, a law firm that has represented large companies, such as Twitter, in mergers and against attacks from hedge funds, on Thursday called on U.S. securities regulators to restrict short sales of financial institutions.
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Wachtell's proposal would revive a ban implemented in 2008. During the financial crisis, short selling was temporarily banned in the U.S., although a New York Federal Reserve review later showed the curb did not achieve the intended effect.
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The SEC declined to comment on Thursday when asked if it should impose a short selling ban.
However, U.S. officials at the federal and state level are assessing the possibility of "market manipulation" behind big moves in banking share prices in recent days
https://www.reuters.com/markets/us/short...023-05-04/
By Carolina Mandl, David French and Svea Herbst-Bayliss
NEW YORK, May 4 (Reuters) - The practice of short selling is coming under increased scrutiny as shares of regional banks remain under pressure, with some calls for more regulatory oversight of the practice.
Short sellers, who borrow shares they expect to fall and hope to repay the loan for less later to pocket the difference, have profited from the banking crisis. They gained US$1.2 billion in the first two days of May
......
Wachtell, Lipton, Rosen & Katz, a law firm that has represented large companies, such as Twitter, in mergers and against attacks from hedge funds, on Thursday called on U.S. securities regulators to restrict short sales of financial institutions.
......
Wachtell's proposal would revive a ban implemented in 2008. During the financial crisis, short selling was temporarily banned in the U.S., although a New York Federal Reserve review later showed the curb did not achieve the intended effect.
......
The SEC declined to comment on Thursday when asked if it should impose a short selling ban.
However, U.S. officials at the federal and state level are assessing the possibility of "market manipulation" behind big moves in banking share prices in recent days
https://www.reuters.com/markets/us/short...023-05-04/
