this was -based on ongoing? at that time congressi
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Posted On: 08/03/2018 11:08:47 AM
this was -based on ongoing? at that time congressioal investigations re the involvement of shorting in creating the great recession an order prohibiting shorting in certain financial sectors i think for 6 months
during this time real estate prices were falling rapidly - lehman fell 62% in one day-didnt copy all the firms affected - too many pages
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 34-58592 / September 18, 2008
EMERGENCY ORDER PURSUANT TO SECTION 12(k)(2) OF THE SECURITIES EXCHANGE ACT OF 1934 TAKING TEMPORARY ACTION TO RESPOND TO MARKET DEVELOPMENTS
The Commission is aware of the continued potential of sudden and excessive fluctuations of securities prices and disruption in the functioning of the securities markets that could threaten fair and orderly markets. In our recent publication of an emergency order under Section 12(k) of the Exchange Act (the “Act”),1 for example, we were concerned about the possible unnecessary or artificial price movements based on unfounded rumors regarding the stability of financial institutions and other issuers exacerbated by “naked” short selling. Our concerns, however, are no longer limited to just the financial institutions that were the subject of the July Emergency Order. Recent market conditions have made us concerned that short selling in the securities of a wider range of financial institutions may be causing sudden and excessive fluctuations of the prices of such securities in such a manner so as to threaten fair and orderly markets.
Given the importance of confidence in our financial markets as a whole, we have become concerned about recent sudden declines in the prices of a wide range of securities. Such price declines can give rise to questions about the underlying financial condition of an issuer, which in turn can create a crisis of confidence, without a fundamental underlying basis. This crisis of confidence can impair the liquidity and
1 See Exchange Act Release No. 58166 (July 15, 2008). See also Exchange Act Release No. 58190 (July 18, 2008) (“Amended July Emergency Order”). See also Exchange Act Release No. 58572 (September 17, 2008).
1
ultimate viability of an issuer, with potentially broad market consequences. Our concerns
are no longer limited to the financial institutions that were the subject of the July
Emergency Order.
As a result of these recent developments, the Commission has concluded that
there continues to exist the potential of sudden and excessive fluctuations of securities
prices generally and disruption in the functioning of the securities markets that could
threaten fair and orderly markets. Based on this conclusion, the Commission is
exercising its powers under Section 12(k)(2) of the Act.2 Pursuant to Section 12(k)(2), in
appropriate circumstances the Commission may issue summarily an order to alter,
supplement, suspend, or impose requirements or restrictions with respect to matters or
actions subject to regulation by the Commission if the Commission determines such an
order is necessary in the public interest and for the protection of investors to maintain or
restore fair and orderly securities markets.
In these unusual and extraordinary circumstances, we have concluded that, to
prevent substantial disruption in the securities markets, temporarily prohibiting any
person from effecting a short sale in the publicly traded securities of certain financial
firms, which entities are identified in Appendix A (“Included Financial Firms”), is in the
public interest and for the protection of investors to maintain or restore fair and orderly
securities markets.
2 This finding of an “emergency” is solely for purposes of Section 12(k)(2) of the
Exchange Act and is not intended to have any other effect or meaning or to confer
any right or impose any obligation other than set forth in this Order.
2
This emergency action should prevent short selling from being used to drive down
the share prices of issuers even where there is no fundamental basis for a price decline
other than general market conditions.
IT IS ORDERED that, pursuant to our Section 12(k)(2) powers, all persons are
prohibited from short selling3 any publicly traded securities of any Included Financial
Firm.
Similar to the Amended July Emergency Order, we are providing a limited
exception for certain bona fide market makers. We believe this narrow exception is
necessary because such market makers may need to facilitate customer orders in a fast
moving market without possible delays associated with complying with the requirements
of this Order.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the following entities are excepted from the requirements of the Order: registered market
makers, block positioners, or other market makers obligated to quote in the over-thecounter
market, in each case that are selling short a publicly traded security of an
Included Financial Firm as part of bona fide market making in such security.
In addition, we are providing an exception to allow short sales that occur as a
result of automatic exercise or assignment of an equity option held prior to effectiveness
of this Order due to expiration of the option.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the requirements of this Order shall not apply to any person that effects a short sale in any
3 The definition of “short sale” shall be the same definition used in Rule 200(a) of
Regulation SHO and the requirements for marking orders “long” or “short” shall
be the same as provided in Regulation SHO.
3
publicly traded security of any Included Financial Firm as a result of automatic exercise
or assignment of an equity option held prior to effectiveness of this Order due to
expiration of the option.
Finally, to facilitate the expiration of options on September 20th, options market
makers are excepted from the requirements of this Order until 11:59 p.m. on September
19th when selling short as part of bona fide market making and hedging activities related
directly to bona fide market making in derivatives on the publicly traded securities of any
Included Financial Firm.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the requirements of this Order shall not apply, until 11:59 p.m. on September 19, 2008, to
any person that is a market maker that effects a short sale as part of a bona fide market
making and hedging activity related directly to bona fide market making in derivatives on
the publicly traded securities of any Included Financial Firm.
This Order shall be effective immediately and shall terminate at 11:59 p.m. EDT
on October 2, 2008, unless further extended by the Commission.
By the Commission.
Florence E. Harmon
Acting Secretary
4
Appendix A
This list, prepared on a best efforts basis, includes banks, insurance companies, and
securities firms identified by SICs 6000, 6011, 6020-22, 6025, 6030, 6035-36, 6111,
6140, 6144, 6200, 6210-11, 6231, 6282, 6305, 6310-11, 6320-21, 6324, 6330-31, 6350-
51, 6360-61, 6712, and 6719.
AAME ATLANTIC AMERICAN CORP
AANB
ABIGAIL ADAMS NATL BANCORP
INC
ABBC ABINGTON BANCORP INC PA
ABCB AMERIS BANCORP
ABCW ANCHOR BANCORP WISCONSIN INC
ABK AMBAC FINANCIAL GROUP INC
ABNJ AMERICAN BANCORP OF NJ INC
ABVA ALLIANCE BANKSHARES CORP
ACAP
AMERICAN PHYSICIANS CAPITAL
INC
ACBA
AMERICAN COMMUNITY BNCSHRS
INC
ACE ACE LTD
ACFC ATLANTIC COAST FED CORP
ACGL ARCH CAPITAL GROUP LTD NEW
ADVNA ADVANTA CORP
ADVNB ADVANTA CORP
AEG AEGON N V
AEL
AMERICAN EQUITY INVT LIFE HLDG
C
AET AETNA INC NEW
AF ASTORIA FINANCIAL CORP
AFFM
AFFIRMATIVE INSURANCE HLDGS
INC
AFG
AMERICAN FINANCIAL GROUP INC
NEW
AFL A F L A C INC
AGII ARGO GROUP INTL HLDGS LTD
AGO ASSURED GUARANTY LTD
AGP AMERIGROUP CORP
AGX ARGAN INC
AHD ATLAS PIPELINE HOLDINGS L P
AHL ASPEN INSURANCE HOLDINGS LTD
AIB ALLIED IRISH BANKS PLC
AIG AMERICAN INTERNATIONAL GROUP
5
INC
AINV APOLLO INVESTMENT CORP
AIZ ASSURANT INC
ALL ALLSTATE CORP
ALLB ALLIANCE BANCORP INC PA
ALNC ALLIANCE FINANCIAL CORP NY
AMCP AMCOMP INC NEW
AMFI AMCORE FINANCIAL INC
AMG AFFILIATED MANAGERS GROUP INC
AMIC AMERICAN INDEPENDENCE CORP
AMNB
AMERICAN NATIONAL
BANKSHARES INC
AMP AMERIPRISE FINANCIAL INC
AMPH AMERICAN PHYSICIANS SVC GROUP
AMRB AMERICAN RIVER BANKSHARES
AMSF AMERISAFE INC
AMTD T D AMERITRADE HOLDING CORP
ANAT AMERICAN NATIONAL INS CO
ANNB ANNAPOLIS BANCORP INC
AOC AON CORP
APAB APPALACHIAN BANCSHARES INC
AROW ARROW FINANCIAL CORP
ASBI AMERIANA BANCORP
ASFI ASTA FUNDING INC
ASFN
ATLANTIC SOUTHERN FINL GROUP
INC
ASRV AMERISERV FINANCIAL INC
ATBC ATLANTIC BANCGROUP INC
ATLO AMES NATL CORP
AUBN AUBURN NATIONAL BANCORP
AWBC
AMERICAN WEST
BANCORPORATION
AWH
ALLIED WORLD ASSUR CO HLDGS
LTD
AXA A X A UAP
AXG
ATLAS ACQUISITION HOLDINGS
CORP
AXS AXIS CAPITAL HOLDINGS LTD
BAC BANK OF AMERICA CORP
BANF BANCFIRST CORP
BANR BANNER CORP
BARI BANCORP RHODE ISLAND INC
BAYN BAY NATIONAL CORP
BBNK BRIDGE CAPITAL HOLDINGS
BBT B B & T CORP
BBX BANKATLANTIC BANCORP INC
6
BCA CORPBANCA
BCAR BANK OF THE CAROLINAS CORP
BCBP B C B BANCORP INC
BCP BROOKE CAPITAL CORP
BCS BARCLAYS PLC
BCSB B C S B BANCORP INC
BDGE BRIDGE BANCORP INC
BEN FRANKLIN RESOURCES INC
BERK BERKSHIRE BANCORP INC DEL
BFF B F C FINANCIAL CORP
BFIN BANKFINACIAL CORP
BFNB
BEACH FIRST NATL BANCSHARES
INC
BHB BAR HARBOR BANKSHARES
BHBC BEVERLY HILLS BANCORP INC
BHLB BERKSHIRE HILLS BANCORP INC
BK BANK OF NEW YORK MELLON CORP
BKBK BRITTON & KOONTZ CAPITAL CORP
BKMU BANK MUTUAL CORP NEW
BKOR
OAK RIDGE FINANCIAL SERVICES
INC
BKSC BANK SOUTH CAROLINA CORP
BKUNA BANKUNITED FINANCIAL CORP
BLX
BANCO LATINOAMERICANO DE EXP
SA
BMRC BANK OF MARIN BANCORP
BMTC BRYN MAWR BANK CORP
BNCL BENEFICIAL MUTUAL BANCORP INC
BNCN B N C BANCORP
BNS BANK OF NOVA SCOTIA
BNV BEVERLY NATIONAL CORP
BOCH BANK OF COMMERCE HOLDINGS
BOFI B OF I HOLDING INC
BOFL BANK OF FLORIDA CORP NAPLES
BOH BANK OF HAWAII CORP
BOKF B O K FINANCIAL CORP
BOMK BANK MCKENNEY VA
BOVA BANK OF VIRGINIA
BPFH BOSTON PRIVATE FINL HLDS INC
BPSG
BROADPOINT SECURITIES GROUP
INC
BRK BERKSHIRE HATHAWAY INC DEL
BRK BERKSHIRE HATHAWAY INC DEL
BRKL BROOKLINE BANCORP INC
BSRR SIERRA BANCORP
BTFG BANCTRUST FINANCIAL GROUP INC
7
BUSE FIRST BUSEY CORP
BWINA BALDWIN & LYONS INC
BWINB BALDWIN & LYONS INC
BX BLACKSTONE GROUP L P
BXS BANCORPSOUTH INC
BYFC BROADWAY FINANCIAL CORP DEL
C CITIGROUP INC
CAC CAMDEN NATIONAL CORP
CACB CASCADE BANCORP
CADE CADENCE FINANCIAL CORP
CAFI CAMCO FINANCIAL CORP
CAPB CAPITALSOUTH BANCORP
CAPE CAPE FEAR BANK CORP
CART CAROLINA TRUST BANK
CARV CARVER BANCORP INC
CASB
during this time real estate prices were falling rapidly - lehman fell 62% in one day-didnt copy all the firms affected - too many pages
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 34-58592 / September 18, 2008
EMERGENCY ORDER PURSUANT TO SECTION 12(k)(2) OF THE SECURITIES EXCHANGE ACT OF 1934 TAKING TEMPORARY ACTION TO RESPOND TO MARKET DEVELOPMENTS
The Commission is aware of the continued potential of sudden and excessive fluctuations of securities prices and disruption in the functioning of the securities markets that could threaten fair and orderly markets. In our recent publication of an emergency order under Section 12(k) of the Exchange Act (the “Act”),1 for example, we were concerned about the possible unnecessary or artificial price movements based on unfounded rumors regarding the stability of financial institutions and other issuers exacerbated by “naked” short selling. Our concerns, however, are no longer limited to just the financial institutions that were the subject of the July Emergency Order. Recent market conditions have made us concerned that short selling in the securities of a wider range of financial institutions may be causing sudden and excessive fluctuations of the prices of such securities in such a manner so as to threaten fair and orderly markets.
Given the importance of confidence in our financial markets as a whole, we have become concerned about recent sudden declines in the prices of a wide range of securities. Such price declines can give rise to questions about the underlying financial condition of an issuer, which in turn can create a crisis of confidence, without a fundamental underlying basis. This crisis of confidence can impair the liquidity and
1 See Exchange Act Release No. 58166 (July 15, 2008). See also Exchange Act Release No. 58190 (July 18, 2008) (“Amended July Emergency Order”). See also Exchange Act Release No. 58572 (September 17, 2008).
1
ultimate viability of an issuer, with potentially broad market consequences. Our concerns
are no longer limited to the financial institutions that were the subject of the July
Emergency Order.
As a result of these recent developments, the Commission has concluded that
there continues to exist the potential of sudden and excessive fluctuations of securities
prices generally and disruption in the functioning of the securities markets that could
threaten fair and orderly markets. Based on this conclusion, the Commission is
exercising its powers under Section 12(k)(2) of the Act.2 Pursuant to Section 12(k)(2), in
appropriate circumstances the Commission may issue summarily an order to alter,
supplement, suspend, or impose requirements or restrictions with respect to matters or
actions subject to regulation by the Commission if the Commission determines such an
order is necessary in the public interest and for the protection of investors to maintain or
restore fair and orderly securities markets.
In these unusual and extraordinary circumstances, we have concluded that, to
prevent substantial disruption in the securities markets, temporarily prohibiting any
person from effecting a short sale in the publicly traded securities of certain financial
firms, which entities are identified in Appendix A (“Included Financial Firms”), is in the
public interest and for the protection of investors to maintain or restore fair and orderly
securities markets.
2 This finding of an “emergency” is solely for purposes of Section 12(k)(2) of the
Exchange Act and is not intended to have any other effect or meaning or to confer
any right or impose any obligation other than set forth in this Order.
2
This emergency action should prevent short selling from being used to drive down
the share prices of issuers even where there is no fundamental basis for a price decline
other than general market conditions.
IT IS ORDERED that, pursuant to our Section 12(k)(2) powers, all persons are
prohibited from short selling3 any publicly traded securities of any Included Financial
Firm.
Similar to the Amended July Emergency Order, we are providing a limited
exception for certain bona fide market makers. We believe this narrow exception is
necessary because such market makers may need to facilitate customer orders in a fast
moving market without possible delays associated with complying with the requirements
of this Order.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the following entities are excepted from the requirements of the Order: registered market
makers, block positioners, or other market makers obligated to quote in the over-thecounter
market, in each case that are selling short a publicly traded security of an
Included Financial Firm as part of bona fide market making in such security.
In addition, we are providing an exception to allow short sales that occur as a
result of automatic exercise or assignment of an equity option held prior to effectiveness
of this Order due to expiration of the option.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the requirements of this Order shall not apply to any person that effects a short sale in any
3 The definition of “short sale” shall be the same definition used in Rule 200(a) of
Regulation SHO and the requirements for marking orders “long” or “short” shall
be the same as provided in Regulation SHO.
3
publicly traded security of any Included Financial Firm as a result of automatic exercise
or assignment of an equity option held prior to effectiveness of this Order due to
expiration of the option.
Finally, to facilitate the expiration of options on September 20th, options market
makers are excepted from the requirements of this Order until 11:59 p.m. on September
19th when selling short as part of bona fide market making and hedging activities related
directly to bona fide market making in derivatives on the publicly traded securities of any
Included Financial Firm.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the requirements of this Order shall not apply, until 11:59 p.m. on September 19, 2008, to
any person that is a market maker that effects a short sale as part of a bona fide market
making and hedging activity related directly to bona fide market making in derivatives on
the publicly traded securities of any Included Financial Firm.
This Order shall be effective immediately and shall terminate at 11:59 p.m. EDT
on October 2, 2008, unless further extended by the Commission.
By the Commission.
Florence E. Harmon
Acting Secretary
4
Appendix A
This list, prepared on a best efforts basis, includes banks, insurance companies, and
securities firms identified by SICs 6000, 6011, 6020-22, 6025, 6030, 6035-36, 6111,
6140, 6144, 6200, 6210-11, 6231, 6282, 6305, 6310-11, 6320-21, 6324, 6330-31, 6350-
51, 6360-61, 6712, and 6719.
AAME ATLANTIC AMERICAN CORP
AANB
ABIGAIL ADAMS NATL BANCORP
INC
ABBC ABINGTON BANCORP INC PA
ABCB AMERIS BANCORP
ABCW ANCHOR BANCORP WISCONSIN INC
ABK AMBAC FINANCIAL GROUP INC
ABNJ AMERICAN BANCORP OF NJ INC
ABVA ALLIANCE BANKSHARES CORP
ACAP
AMERICAN PHYSICIANS CAPITAL
INC
ACBA
AMERICAN COMMUNITY BNCSHRS
INC
ACE ACE LTD
ACFC ATLANTIC COAST FED CORP
ACGL ARCH CAPITAL GROUP LTD NEW
ADVNA ADVANTA CORP
ADVNB ADVANTA CORP
AEG AEGON N V
AEL
AMERICAN EQUITY INVT LIFE HLDG
C
AET AETNA INC NEW
AF ASTORIA FINANCIAL CORP
AFFM
AFFIRMATIVE INSURANCE HLDGS
INC
AFG
AMERICAN FINANCIAL GROUP INC
NEW
AFL A F L A C INC
AGII ARGO GROUP INTL HLDGS LTD
AGO ASSURED GUARANTY LTD
AGP AMERIGROUP CORP
AGX ARGAN INC
AHD ATLAS PIPELINE HOLDINGS L P
AHL ASPEN INSURANCE HOLDINGS LTD
AIB ALLIED IRISH BANKS PLC
AIG AMERICAN INTERNATIONAL GROUP
5
INC
AINV APOLLO INVESTMENT CORP
AIZ ASSURANT INC
ALL ALLSTATE CORP
ALLB ALLIANCE BANCORP INC PA
ALNC ALLIANCE FINANCIAL CORP NY
AMCP AMCOMP INC NEW
AMFI AMCORE FINANCIAL INC
AMG AFFILIATED MANAGERS GROUP INC
AMIC AMERICAN INDEPENDENCE CORP
AMNB
AMERICAN NATIONAL
BANKSHARES INC
AMP AMERIPRISE FINANCIAL INC
AMPH AMERICAN PHYSICIANS SVC GROUP
AMRB AMERICAN RIVER BANKSHARES
AMSF AMERISAFE INC
AMTD T D AMERITRADE HOLDING CORP
ANAT AMERICAN NATIONAL INS CO
ANNB ANNAPOLIS BANCORP INC
AOC AON CORP
APAB APPALACHIAN BANCSHARES INC
AROW ARROW FINANCIAL CORP
ASBI AMERIANA BANCORP
ASFI ASTA FUNDING INC
ASFN
ATLANTIC SOUTHERN FINL GROUP
INC
ASRV AMERISERV FINANCIAL INC
ATBC ATLANTIC BANCGROUP INC
ATLO AMES NATL CORP
AUBN AUBURN NATIONAL BANCORP
AWBC
AMERICAN WEST
BANCORPORATION
AWH
ALLIED WORLD ASSUR CO HLDGS
LTD
AXA A X A UAP
AXG
ATLAS ACQUISITION HOLDINGS
CORP
AXS AXIS CAPITAL HOLDINGS LTD
BAC BANK OF AMERICA CORP
BANF BANCFIRST CORP
BANR BANNER CORP
BARI BANCORP RHODE ISLAND INC
BAYN BAY NATIONAL CORP
BBNK BRIDGE CAPITAL HOLDINGS
BBT B B & T CORP
BBX BANKATLANTIC BANCORP INC
6
BCA CORPBANCA
BCAR BANK OF THE CAROLINAS CORP
BCBP B C B BANCORP INC
BCP BROOKE CAPITAL CORP
BCS BARCLAYS PLC
BCSB B C S B BANCORP INC
BDGE BRIDGE BANCORP INC
BEN FRANKLIN RESOURCES INC
BERK BERKSHIRE BANCORP INC DEL
BFF B F C FINANCIAL CORP
BFIN BANKFINACIAL CORP
BFNB
BEACH FIRST NATL BANCSHARES
INC
BHB BAR HARBOR BANKSHARES
BHBC BEVERLY HILLS BANCORP INC
BHLB BERKSHIRE HILLS BANCORP INC
BK BANK OF NEW YORK MELLON CORP
BKBK BRITTON & KOONTZ CAPITAL CORP
BKMU BANK MUTUAL CORP NEW
BKOR
OAK RIDGE FINANCIAL SERVICES
INC
BKSC BANK SOUTH CAROLINA CORP
BKUNA BANKUNITED FINANCIAL CORP
BLX
BANCO LATINOAMERICANO DE EXP
SA
BMRC BANK OF MARIN BANCORP
BMTC BRYN MAWR BANK CORP
BNCL BENEFICIAL MUTUAL BANCORP INC
BNCN B N C BANCORP
BNS BANK OF NOVA SCOTIA
BNV BEVERLY NATIONAL CORP
BOCH BANK OF COMMERCE HOLDINGS
BOFI B OF I HOLDING INC
BOFL BANK OF FLORIDA CORP NAPLES
BOH BANK OF HAWAII CORP
BOKF B O K FINANCIAL CORP
BOMK BANK MCKENNEY VA
BOVA BANK OF VIRGINIA
BPFH BOSTON PRIVATE FINL HLDS INC
BPSG
BROADPOINT SECURITIES GROUP
INC
BRK BERKSHIRE HATHAWAY INC DEL
BRK BERKSHIRE HATHAWAY INC DEL
BRKL BROOKLINE BANCORP INC
BSRR SIERRA BANCORP
BTFG BANCTRUST FINANCIAL GROUP INC
7
BUSE FIRST BUSEY CORP
BWINA BALDWIN & LYONS INC
BWINB BALDWIN & LYONS INC
BX BLACKSTONE GROUP L P
BXS BANCORPSOUTH INC
BYFC BROADWAY FINANCIAL CORP DEL
C CITIGROUP INC
CAC CAMDEN NATIONAL CORP
CACB CASCADE BANCORP
CADE CADENCE FINANCIAL CORP
CAFI CAMCO FINANCIAL CORP
CAPB CAPITALSOUTH BANCORP
CAPE CAPE FEAR BANK CORP
CART CAROLINA TRUST BANK
CARV CARVER BANCORP INC
CASB
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