Lehman and Shorting

WSJ: Lehman Legacy Alters Global Markets

The legacy of the crisis may turn out to be rules that address longstanding controversies with short selling and attempt to prevent selling frenzies like those that occurred last fall. Still, critics of short selling, including some in Congress, haven't stopped their calls for tighter rules, even though there is little evidence these restrictions are effective.

Calling last year's ban a "disaster" for the smooth functioning of the stock market, Charles Jones, a finance professor at Columbia University, says the SEC has "moved toward a 'sand in the gears' approach of just slowing" the short sellers, he says.

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