XpresSpa Group Inc (XSPA)

[Profit_Paul]

Other Possible SEC Actions - Vringo make a call

Beyond strict enforcement policy, the SEC may also consider implementing additional trading rules designed to parry the impact of false rumors and bear raids. Like the Emergency Order restricting naked short selling, the SEC may consider the reinstallation of the short selling uptick rule, Rule 10a-1 under the Exchange Act. Consideration of a renewed Rule 10a-1 may be, in whole or in part, the additional rule making alluded to in the SEC’s press release announcing the emergency order. That rule, designed to preclude short-selling in a downward trending market, required that every short sale be transacted at a price higher than the price of the previous trade (or equal to the prior trade if that prior trade was made on a plus tick). The rule, originally implemented in 1938, was rescinded in July 2007.

Despite the uncertainty of enforcement theories and the difficulty of gathering proof in false rumor cases, one thing is for certain – as long as severe market instability continues, the SEC will be looking for a solution. The SEC no doubt will aggressively investigate allegations of false rumors and pursue broad theories of liability against those who may knowingly spread such rumors to affect the market price of registered securities.