CSMG Technologies, Inc (fka CTGI)

[sojourner]

From the WSJ a more explanatory piece regarding SEC actions against naked shorting. That inertial public agency, ever cozy with Wall Street interests, is acting defensively lest mounting political pressure-- as expressed by the Senate Finance Committee cf. http://tinyurl.com/l97noh --attacks the naked shorting problem legislatively.

The timeliness of reporting of short interest is under consideration at SEC. EOD trading volume is disseminated by the market every day. In this age of advanced computerization, why not EOD short interest listed daily per trading firm? In the old days, short interest was published only monthly by SEC regulation. Now, every two weeks for OTC. What Wall Street seeks to withhold about market/trading particulars is doubtless what is most important for their self-interest.

After the financial meltdown, the Madoff scandal, and the malignant, if not corrupt, reign of ex SEC chief Chris "See No Evil" Cox, it's a wonder how the SEC can still be expected to do anything right by the small investor.

http://online.wsj.com/article/SB124871727822084391.html#
July 27, 2009, 3:34 P.M. ET

SEC to Limit 'Naked' Short-Selling

By SARAH N. LYNCH

WASHINGTON -- Amid intense political pressure, the Securities and Exchange Commission Monday said it is taking several steps toward curbing so-called naked short-selling.

Short-selling, or borrowing and then selling shares in the hope the stock price will fall, has been blamed by some for driving down the shares of financial stocks. Of particular concern to some critics is naked short-selling, in which investors sell the stock without first borrowing the shares.

The SEC said it will make permanent an interim rule passed during last fall's market turmoil that requires broker-dealers to promptly purchase or borrow securities to deliver on a short-sale.

These "naked" short-sales are technically permitted, however, because there is no legal requirement that a short-seller actually borrow the shares before effecting the sale.

That is why investors, federal lawmakers and even the SEC's own internal watchdog have called on the agency recently to do more to curb the practice.

Additionally, the SEC said it is working with several self-regulatory organizations to make short-sale volume and transaction data available to the public on the Internet. Such a move will enhance the amount of information already disclosed under another temporary rule currently. That rule, which expires in August, applies only to certain institutional money managers and doesn't require public disclosure, the SEC said.

Instead of renewing that temporary rule, the agency said it is pushing for broader disclosure of information to people outside of the commission. This will mark the first time that daily aggregate short-sale volume has ever been published, and the SEC said it is hoping to have the information available in the coming weeks.

"Today's actions demonstrate the commission's determination to address short-selling abuses while at the same time increasing public disclosure of short-selling activities that affect our markets," SEC Chairman Mary Schapiro said in a statement.

A bipartisan group of six senators sent the SEC a letter in April threatening to take legislative action if the SEC did not adequately address the issue. Most recently, some of those same lawmakers -- including Sens. Ted Kaufman (D., Del.) and Johnny Isakson (R., Ga.) -- wrote the agency a letter urging it to pass a rule prohibiting all short-sales unless the executing broker first obtains a unique identification number for the specified shares. This kind of rule, the senators wrote, would prevent multiple short-sales on the basis of a single share.

The newly finalized naked short-selling rule requires broker-dealers acting on a short-seller's behalf to locate an entity that the broker believes can deliver the shares within three days after the trade. If investors or broker-dealers do not deliver shares within those three days, it triggers what is known as a "failure to deliver."

If the failure to deliver is not closed out by the beginning of trading on the day after it occurs, the rule imposes penalties on broker-dealers, including a prohibition on effecting further short-sales in the same security unless the shares are both located and pre-borrowed.

Studies by the SEC's economists have found that the interim rule thus far has been highly effective, reducing fails to deliver by 57% since the fall of 2008.

Meanwhile, the information about short-sales soon to be released by the SROS will provide the public with information about short-selling volumes broken down by individual equities each day, as well as information on a one-month delayed basis about individual short-sales in all exchange-listed securities.

The SEC, in addition, will beef up its own Web site's information where it lists fails to deliver data by reporting it twice a month and reporting it for all equity securities, regardless of the fails level.

The SEC said it will hold a roundtable on Sept. 30 to discuss possible new regulations to curb abusive short-selling, such as a pre-borrow requirement and the suggestions recently advocated by several U.S. senators.

Separately, the SEC is also reviewing several other proposals to limit short-selling, possibly by reinstating a similar version of the "uptick" rule or imposing a circuit-breaker. A final decision on those proposals is expected later this summer.

Write to Sarah N. Lynch at [e-mail]