Bloomberg – The U.S. Securities and Exchange Commission may require hedge funds to disclose their short-sale positions and plans to subpoena the funds’ communication records in an effort to stem turmoil in stock markets.

Hedge funds and investors managing more than $100 million in securities would be “required to promptly begin public reporting of their daily short positions,” Chairman Christopher Cox said in a statement yesterday. The proposed disclosure is in addition to three SEC rules that took effect today aimed at reducing manipulative trades betting on a drop in share prices.

Lawmakers including U.S. Senate Banking Committee Chairman Christopher Dodd and executives such as Morgan Stanley Chief Executive Officer John Mack say short sellers may be spreading false information and using abusive tactics to attack companies. Hedge funds say poor business strategies are to blame and an industry spokesman said the SEC announcement was “abrupt.”

“The consequences of a hasty or ill-considered rule in this environment could be extremely harmful to the capital markets,” said Jim Chanos, chairman of the Coalition of Private Investment Companies, which represents 20 funds with assets in excess of $120 billion. “Such a requirement is akin to the government suddenly requiring Coca-Cola to disclose their secret formula for free to all their competitors.”

Read Complete Article

Tags: amendment-to-the-us-constitution, arthur-sulzberger, financial-structures, global-economy, internal-debate, new-marketplace, qualitative-assessment, securities-and-exchange-commission, spqr-capital, stock-loan, tacoma-washington, world-equity

Washington Post – When the Securities and Exchange Commission issued an emergency order last month protecting the stocks of the country’s largest financial institutions against a form of short selling, three businessmen saw an opportunity.

Harvey Pitt, SEC chairman from 2001 to 2003 and chief executive of District-based global consulting firm Kalorama Partners, teamed up with John Tabacco, chief executive of LocateStock.com, and Tom Ronk, the chief executive of Buyins.net, to launch RegSHO.com.

The D.C. company operates a Web-based, real-time electronic stock lending and location service that provides tools to help sellers and brokerage firms comply with SEC rules governing naked short selling — the practice the agency sought to prevent — and regular short sales of stocks. The Web site matches traders with available stocks that can be borrowed for short sales and offers immediate data on the short-sell market. It is named after the SEC’s order regulating such trades, Regulation SHO.

Read Complete Article

Tags: amendment-to-the-us-constitution, emirates, new-marketplace, news-press, pension-funds, percent-stake, savings-and-loan-crisis, sec-rule, trips-to-mexico