Is it illegal to post short calls on my blog?

[comintel]

Quote from Petsamo:

Are you sure?
I believe you have to be registered if you receive compensation.

That is a key factor if you are giving individualized advice.

See

http://www.seclaw.com/docs/RIAOverview.htm

Section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-2(a)(11)), which is a key federal law, defines "investment adviser" in part as "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities."

However, expressly excluded from the definition is "the publisher of bona fide newspaper, news magazine or business or financial publication of general and regular circulation."

Section 401(f) of the Uniform Securities Act, upon which the majority of state securities laws are based, similarly excludes from the definition of investment adviser "a publisher of any bona fide newspaper, news column, newsletter, news magazine, or business or financial publication or service, whether communicated in hard copy form, or by electronic means, or otherwise, that does not consist of the rendering of advice on the basis of the specific investment situation of each client."

If you look at some investment newsletters, you will see that the majority of them are not registered because they do not need to be (and do not want to be because doing so would subject them to additional requirements).

The SEC proposed requiring a minimal form of registration of newsletters and web sites once or twice but was beaten back from even a minimal requirement.

 

[HurricaneUS]

Quote from rolando87:

.... suggest my readers to short a particular company. ...

that sounds fishy...why would you want to "suggest" to your readers to short a company?

....unless you're trying to gain financially.


Don't suggest anything...always offer information that it is to be intended for educational purposes....plus have all of the required disclaimers on the site....but never suggest because it's not in your interest...if so and so loses money on a recommendation then the next thing you know they will be trying to sue for damages not to mention the potential manipulation of the stock's price depending on the size of your readership.....

 

[riskbiscuit]

I believe it's only illegal when you are a license broker and your blog has not been approved by the SEC and also if your blog traders are compensating you for this blog or to receive your trade suggestions. I would definitely check the SEC website though just to make sure.

 

[Surdo]

Quote from HurricaneUS:

that sounds fishy...why would you want to "suggest" to your readers to short a company?

Why is suggesting a short any fishier than suggesting a long, explain your "Fishy" comment?

 

[comintel]

Quote from Surdo:

Why is suggesting a short any fishier than suggesting a long, explain your "Fishy" comment?

If you meant that you would suggest shorting one particular company, possibly one where you had some vested interest or conflict, that would be fishy.

But I think you just meant that you would be shorting some and buying others, based on ongoing technical/ fundamental analysis or whatever, which would be fine.

As a matter of fact there are already such blogs, some by well-known short sellers in the penny stock area, that are quite popular and do not present a problem in general, even those that have fees attached.