Regulatory Action in The Credit Crunch
The SEC announced on September 17, 2008, strict new rules to prohibit all forms of "naked short selling" as a measure to reduce volatility in turbulent markets.
The SEC investigated cases involving individuals attempting to manipulate the market by passing false rumors about certain financial institutions. The Commission has also investigated trading irregularities and abusive short-selling practices. Hedge fund managers, broker-dealers, and institutional investors were also asked to disclose under oath certain information pertaining to their positions in credit default swaps. The Commission also negotiated the largest settlements in the history of the SEC (approximately $51 billion in all) on behalf of investors who purchased auction rate securities from six different financial institutions.
Read more about this topic: United States Securities And Exchange Commission
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