Replies to post #4199 on Tri-Valley Corp (fka TVLYQ)

[SA12]

I've been following this story.

It's in direct response to the Bear Sterns collapse. If you read the article I posted a few days ago, Bear Sterns collapsed due to a run on the company combined with a very rapid drying up of credit. The emerging theory is that the run/credit crunch was the result of rumors being spread by a couple of shorts. They did it through the common practice of asking one bank to take on the debt of another owed to their client. Normally this is a rubber stamp transaction if the receiving bank already has a credit agreement with the sending bank, which they usually do. But in this case a few shorts directed these transfers to a very small number of receiving banks which made the receiving banks take notice and suspend receiving them until they could chek it out. That started the rumor mills that Bear had a liquidity problem and from there the run and credit crunch snow-balled. I hear the Fed is supper-pissed about this.

This is real manipulation not like the imaginary stuff constantly bandied about by TIV's resident conspiracy theorists.

[Howardb41]

SEC moves on short sellers
2 hours, 42 minutes ago

The Securities and Exchange Commission will issue an emergency rule later on Tuesday to stop "naked" short selling in major financial firms, including Fannie Mae (FNM.N) and Freddie Mac (FRE.N), the SEC said.

Short sellers borrow shares they consider overvalued and sell them. If the price drops, they repurchase the shares, return them and pocket the difference.

In a naked short sale, the investor sells stock that has not yet been borrowed. Sellers sometimes deliberately fail to deliver securities as part of a scheme to manipulate the stock price.

The emergency rule would require any person making a short sale in the listed securities to borrow the securities before the short sale is effected and deliver the securities on the settlement date.

The SEC has already proposed rules to curb naked short selling abuses and prevent market price manipulation.

(Reporting by Rachelle Younglai; Editing by Tim Dobbyn)

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