Psst. Have you heard? SEC on the prowl to catch rumor mongers
Folks at the SEC were working overtime Sunday to get out the word that they were going to crack down on the “intentional spread of false information intended to manipulate securities prices.”
Notice the double usage of terms springing from the root word “intent” and you can imagine how hard this exercise will be. But cops of any kind can cause problems in the short run, even if the objects of their attention are law-abiding citizens and the evidence they gather never results in a conviction.
Where will the SEC rumor-patrol begin? Monitoring Twitter traffic or the Yahoo message boards?
The SEC release reminded us that “securities laws require that broker-dealers and investment advisers have supervisory and compliance controls to prevent violations of the securities laws, including market manipulation.” So look for some examination of a high-profile Wall Street firm or two into the rumor-controls they have in place and “whether they are reasonably designed to prevent the intentional creation or spreading of false information intended to affect securities prices, or other potentially manipulative conduct.”
The SEC probably wanted to get ahead of the opening of markets in Asia prior to what may be another gut-wrenching week on Wall Street. Earlier Sunday the Federal Reserve and the U.S. Treasury Department announced steps to aid mortgage giants Fannie Mae and Freddie Mac, whose shares have plunged as losses from their mortgage holdings threatened their financial survival.
Initial reactions in Asian markets appear muted, with the Nikkei 225 up just over half a percentage point while the S&P Australian Index down half a percentage point as 5:45 p.m., PDT.
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The short sellers have been using entire call centers of underpaid Filipinos and people from India to lie and smear companies on just such places.
After all, to a hedge fund with 100M short position open on one company, it more than pays for itself to spend $1000 per day for an army of 3rd world english speakers to say the CEO has AIDS and the company is being investigated, etc, in ever possible user-generated content outlet.
This kind of rampant propagandizing should be universally discouraged by conservatives and liberals alike. However, for some reason, many liberal news outlets are now circling the wagons around this hardcore group of short sellers. What could they be hiding?
Geeze… what a load of crap. We’re in “shoot the messenger” mode. These same right wing lunatics who attacked folks who predicted that Iraq wouldn’t be a “cakewalk”, are pulling their same inane attacks out and going after folks who cut through the cooked books of financial institutions and warn that banks are underfunded.