RushNet Inc (RSHN)

[sojourner]

Flash! SEC Chairman Chris Cox Addresses Naked Short Selling along with Chairman Donohue, CEO of U.S. Chamber of Congress

It looks as if recent Bloomberg TV piece might have been the straw that broke this camel's back.

http://www.regonline.com/Checkin.asp?EventId=116995
http://www.uschamber.com/press/speeches/2007/070314_cap_markets_donohue.htm

The First Annual Capital Markets Summit: Securing America's Competitiveness

Date: 14-Mar-2007 8:15 AM - 5:00 PM

Comments by Chairman Cox during Q & A.

AUDIENCE MEMBER: Chairman Cox, Jonathan Johnson, Overstock.com. You have mentioned in the past that abusive naked short selling is being used to manipulate stock prices down to the detriment of investors. Last month, the Chamber sent a letter requesting that Congress hold hearings on the issue and last night Bloomberg TV ran a piece, a special report, on this issue. What is the Commission doing to stop this form of manipulation and when can we expect some action?

CHAIRMAN COX: Abusive naked short selling is of great concern to the entire Commission, to all of our members and the professional staff at the SEC. The regulation that was first adopted to get after this and related problems, Reg SHO, has proven insufficient to stop the problem. One of the reasons is the Grandfather provision in the rule as it was originally adopted, so we are now setting out, as you know, to eliminate that grandfather provision. And we will do more.

Just as Congress may well have hearings on this issue and seek to get more information, so too are we looking at this.

As you know, there’s a technological side to this. This is very closely connected to our system of clearing and settlement in a very very big market, and we want to make sure that we use technology as our friend in relating, potentially and at all times, ownership and particular shares rather than waiting until the end of an arbitrary period of time to match those things up. It’s those sorts of things that I think will eventually help us, I think, put an end to this kind of abuse.

And I know that people victimized by it have a great deal of right on their side to complain about it.

CHAIRMAN DONOHUE: You have a lot of support from here in getting that done. Just let us know how we can get some muscle behind it. It is a serious challenge.