Canberra drags its heels as the SEC tackles the problem

The Australian- The SEC’s decision to take a hard line on the illegal practice of naked short-selling is a band-aid attempt to fix a problem that is plaguing most stock markets in various guises, but at least it is having a go.

The order lasts 30 days and covers 19 stocks, including the Wall Street jockeys Merrill Lynch, Lehman Brothers and troubled mortgage giants Fannie Mae and Freddie Mac.

In sharp contrast, the Australian Government has dragged its heels on short-selling abuses and isn’t expected to make any announcements until the second quarter of the year.

Meanwhile, stocks are being bludgeoned on the ASX as hedge funds borrow stocks from our super funds to attack companies. They are doing it with ease because there is little buyer support in the market, little transparency on covered short-selling, no capital gains tax and small fees charged on share lending.

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