wonderful stuff. This turd of an economy is swirling down the porceline bowl known as Wall St. , and no one cares. But John and Lloyd don't like it when it's done to them, so they call Hillary and Chuck.
Sen. Clinton Seeks Tougher Action On Short Sales
September 17, 2008: 07:15 PM EST
WASHINGTON -(Dow Jones)- Morgan Stanley (MS) executives, unhappy with the punishing that Morgan's stock is taking from short sellers, have asked U.S. regulators and lawmakers to impose tougher restrictions on such trading.
Sen. Hillary Rodham Clinton, D-N.Y., appears sympathetic to the concerns. In a letter Wednesday, Clinton urged Securities and Exchange Commission Chairman Christopher Cox to take immediate steps to safeguard "substantial financial firms" for short-selling abuses.
Clinton also suggested the SEC consider reimposing "tick test" restrictions it eliminated last year, which allowed short sales only when a stock's price is moving higher.
"Time is of the essence, as just a few days of delay could be runinous" for market confidence and individual companies, Clinton wrote.
Morgan, now one of two remaining independent investment banks on Wall Street, saw its stock price slide 24% on Wednesday, closing at $21.75. The steep drop came a day after Morgan reported third-quarter earnings that exceeded expectations, generating $1.4 billion of net income. Company insiders blame the declines on rumor-driven short selling.
Morgan Chief Executive John Mack issued a note to employees reassuring them about the company and called Treasury Secretary Henry Paulson on Wednesday to discuss his concerns about the beating the firm's stock is taking, according to an individual familiar with the matter, who agreed to speak anonymously.
Treasury spokeswoman Brookly McLaughlin declined to comment except to say " we're always speaking to market participants."
Morgan executives also have contacted SEC Chairman Cox and heavy-hitting lawmakers, including Sens. Clinton and Charles Schumer, D-N.Y. The message: take action to protect financial services firms from manipulative short selling.
The conversations have been going on throughout the week, since Lehman Brothers Holdings Inc. (LEH) declared bankruptcy, and continued after the SEC issued new rules Wednesday to crack down on short-selling abuses, according to this individual.
The SEC rules, which take effect Thursday, cover short sales for all public company stocks and don't include specific provisions targeted to financial stocks, in contrast to a temporary emergency order the SEC issued in July that applied to 19 stocks, including Morgan Stanley and federal housing-finance giants Fannie Mae (FNM) and Freddie Mac (FRE). While the emergency order required pre-borrowing shares in advance of short sales in the 19 stocks, the new rule firms up stock delivery requirements after short sale trades settle.
Clinton called on the SEC to re-impose the emergency order for select stocks. She said current market conditions "pose a gerater threat than the conditions in July which triggered the commission's emergency actions," and noted that some of the stocks protected by the emergency have since gone bankrupt or been subject to a federal government bailout. In addition, she suggested the SEC give "close consideration" to calls for an immediate restoration of the so-called "uptick" rule.
Morgan Stanley and a spokesman for Sen. Schumer didn't immediately return a phone call seeking comment. SEC spokesman John Nester had no immediate comment.
Short sellers profit from declining stock prices by borrowing shares for sale and replacing them later at a lower price. The practice is legal and in recent years the SEC has lifted some restrictions on short-sales. At the same time, the SEC has aimed to curb abusive "naked" short selling, in which shares are sold short without any borrowing beforehand, a practice which can have devastating effects on a stock's price.
-By Judith Burns, Dow Jones Newswires; 202-862-6692; Judith.Burns@dowjones.com
http://money.cnn.com/news/newsfeeds/articles/djf500/200809171915DOWJONESDJONLINE001026_FORTUNE5.htm
Sen. Clinton Seeks Tougher Action On Short Sales
September 17, 2008: 07:15 PM EST
WASHINGTON -(Dow Jones)- Morgan Stanley (MS) executives, unhappy with the punishing that Morgan's stock is taking from short sellers, have asked U.S. regulators and lawmakers to impose tougher restrictions on such trading.
Sen. Hillary Rodham Clinton, D-N.Y., appears sympathetic to the concerns. In a letter Wednesday, Clinton urged Securities and Exchange Commission Chairman Christopher Cox to take immediate steps to safeguard "substantial financial firms" for short-selling abuses.
Clinton also suggested the SEC consider reimposing "tick test" restrictions it eliminated last year, which allowed short sales only when a stock's price is moving higher.
"Time is of the essence, as just a few days of delay could be runinous" for market confidence and individual companies, Clinton wrote.
Morgan, now one of two remaining independent investment banks on Wall Street, saw its stock price slide 24% on Wednesday, closing at $21.75. The steep drop came a day after Morgan reported third-quarter earnings that exceeded expectations, generating $1.4 billion of net income. Company insiders blame the declines on rumor-driven short selling.
Morgan Chief Executive John Mack issued a note to employees reassuring them about the company and called Treasury Secretary Henry Paulson on Wednesday to discuss his concerns about the beating the firm's stock is taking, according to an individual familiar with the matter, who agreed to speak anonymously.
Treasury spokeswoman Brookly McLaughlin declined to comment except to say " we're always speaking to market participants."
Morgan executives also have contacted SEC Chairman Cox and heavy-hitting lawmakers, including Sens. Clinton and Charles Schumer, D-N.Y. The message: take action to protect financial services firms from manipulative short selling.
The conversations have been going on throughout the week, since Lehman Brothers Holdings Inc. (LEH) declared bankruptcy, and continued after the SEC issued new rules Wednesday to crack down on short-selling abuses, according to this individual.
The SEC rules, which take effect Thursday, cover short sales for all public company stocks and don't include specific provisions targeted to financial stocks, in contrast to a temporary emergency order the SEC issued in July that applied to 19 stocks, including Morgan Stanley and federal housing-finance giants Fannie Mae (FNM) and Freddie Mac (FRE). While the emergency order required pre-borrowing shares in advance of short sales in the 19 stocks, the new rule firms up stock delivery requirements after short sale trades settle.
Clinton called on the SEC to re-impose the emergency order for select stocks. She said current market conditions "pose a gerater threat than the conditions in July which triggered the commission's emergency actions," and noted that some of the stocks protected by the emergency have since gone bankrupt or been subject to a federal government bailout. In addition, she suggested the SEC give "close consideration" to calls for an immediate restoration of the so-called "uptick" rule.
Morgan Stanley and a spokesman for Sen. Schumer didn't immediately return a phone call seeking comment. SEC spokesman John Nester had no immediate comment.
Short sellers profit from declining stock prices by borrowing shares for sale and replacing them later at a lower price. The practice is legal and in recent years the SEC has lifted some restrictions on short-sales. At the same time, the SEC has aimed to curb abusive "naked" short selling, in which shares are sold short without any borrowing beforehand, a practice which can have devastating effects on a stock's price.
-By Judith Burns, Dow Jones Newswires; 202-862-6692; Judith.Burns@dowjones.com
http://money.cnn.com/news/newsfeeds/articles/djf500/200809171915DOWJONESDJONLINE001026_FORTUNE5.htm