Alerts

SEC Announces “Sweeping Expansion” of Its Investigation of Short Selling by Hedge Funds and Other Market Participants...

September 22, 2008

On the heels of last week’s emergency order by the Securities and Exchange Commission (“SEC” or “Commission”) banning short selling in securities of certain financial services companies and requiring weekly disclosure of short positions, the Commission has significantly broadened its investigation into the spreading of false rumors and other manipulative practices with respect to financial services companies, and the New York Attorney General has announced the commencement of an investigation based on complaints of false rumors with respect to four financial services companies. The Alabama Securities Commission is also engaged in a broad investigation of similar conduct relating to certain financial services companies based in Alabama. It is possible that other state securities regulators and foreign regulators will commence similar investigations.