In another non-surprise to Wall Street Insiders and massive surprise to the common investor, the SEC handed out several naked short selling fines over the last month, to prove to casual investors that they are still "looking out for the little guy".

The Wall Street Journal reported :

Jonathan Feldman, who was accused by the SEC of trading billions of dollars of stock and options in ways that misled other investors, was found by the judge to have engaged in a practice regulators say has grown more prevalent in recent years: "naked short selling."

The decision makes it more likely the SEC will proceed with other enforcement cases involving similar activity, say people familiar with the SEC's thinking.

An SEC administrative law judge-an independent judicial officer who rules on SEC allegations of securities-law violations-late Friday ordered Mr. Feldman to disgorge $2.7 million in profits from his alleged trading scheme and to pay a $2 million civil fine.

The judge also ordered optionsXpress Inc., a brokerage firm owned by Charles Schwab Corp ( SCHW )., to disgorge $1.6 million and to pay a $2 million civil fine for allegedly violating laws prohibiting naked short selling.

Many investors are hoping that the recent light shed on naked short selling, and the corresponding actions by the SEC are paving the way for the SEC to seriously go after what some people call the biggest problem on Wall Street -selling stock that doesn't technically exist.....

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