But it doesn’t stop there. In a surprise move, SEC Chief Chris Cox also proposed that big investors, including hedge funds, begin publicly reporting their short positions daily.
"Cox is hoping that some investors will be discouraged from shorting stocks if they have to let the world know they’re doing it," explains the LA Times.
Contrarian investor Bill Fleckenstein finds the move outrageous. “Short sellers if anything have been warning about these problems. To change the rules in the middle of the game because they don’t like the outcome is just a disgrace,” he says on Fast Money.
Essentially, Fleckenstein feels if the shorts drove these stocks to levels they were not warranted buyers would have stepped in and the price would have corrected.
- SEC Plans to Temporarily Ban Short-Selling
And that’s not all. Fleckenstein feels like the move is the equivalent of market manipulation on the part of the government. “To change the rules almost overnight on the day before an expiration is almost like market manipulation on the part of the SEC!” he concludes.
Should be interesting.
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Trader disclosure: On Sept 18, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;Macke Owns (SDS), (WMT), (MSFT); Adami Owns (AGU), (BTU), (C), (GS), (MSFT), (NUE); Pete Najarian Owns (AAPL) And (AAPL) Collar; Pete Najarian Owns (ETFC); Pete Najarian Owns (MS) And (MS) Puts; Pete Najarian Owns (NOK) And Is Short (NOK) Calls; Pete Najarian Owns (RIMM) Call Spreads; Pete Najarian Owns (TSO) Call Spread; Pete Najarian Owns (WB) Put Spread; Pete Najarian Owns (WM) And (WM) Puts; Pete Najarian Owns (XLF) And (XLF) Puts; Finerman Owns (GS); Finerman's Firm Owns (MO), (MSFT), (NOK), (SUN), (TSO), (VLO); Finerman's Firm Owns (WFC) Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (COF)