One of my heroes of tell-it-like-it-is business journalism (which is something I aspire to) is Gary Weiss. He covers the seedier side of Wall Street, and one of his favorite topics is the naked short scandal which he believes, as do I, is a red herring designed to distract investors from the real issue at the companies crying fail to deliver: their own failure to deliver profits.
When it was announced that the SEC was cracking down on naked short selling on Thursday, Weiss responded with (SEC head) Chris Cox OD's on Bologna. Never one to mince words, Weiss wrote that "As I pointed out a few days ago, the SEC's meeting yesterday resembled a cheaply stocked delicatessen more than it did a regulatory agency, with half the agenda devoted to baloney -- the nonexistent "naked short selling" scandal, promoted by a handful of crackpots and corporate losers in the Baloney Brigade."
He went on to say "OK, so where's all the punishment? Where are all the SEC enforcement actions? Where are all the customer complaints of genuine harm committed by genuine naked shorting of genuine, sound, non-money losing companies?"
I'm extending a challenge on BloggingStocks. If anyone can send me the name of a genuine, sound, non-money losing company along with evidence of how the company has been damaged by naked short-selling, I will post a detailed apology.
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Reader Comments (Page 1 of 1)
6-15-2007 @ 4:19PM
Steve said...
There's only one way to stop these naked short sellers. Just have your company perform well and hurt them where it counts: their wallet. Management's issue isn't to worry about the short term price which may or may not be hampered by this "problem". Their job is to create long term shareholder value and the stock price will reflect that value in time. I think any basic corporate finance course goes over to do this (demonstrate trust by buying back shares, issuing debt rather than underpriced equity, etc). Ranting at the SEC is not one of them.
I can't believe the SEC is wasting their time on such a non-issue compared to all the other gray issues out there, like Cramer flaunting how much rule-bending/breaking he got away with (and probably still does) right underneath the SEC's nose.