Wachtell, Lipton, Rosen & Katz, a law firm that has represented large corporations such as Twitter in mergers and against hedge fund attacks, week Four said US securities regulators restrict short selling by financial institutions.
In a letter to clients, Wachtell stated that the SEC should implement -Financial institutions are prohibited from short selling on the trading day. This will allow time for regulators to act and for investors to digest the information, said Edward D. Herlihy, co-chairman and partner at Wachtell Matthew M. Guest wrote in the letter, adding that the attacks by short sellers had nothing to do with fundamental performance and put the U.S. economy at “significant risk.” The law firm did not specify any stocks that were subject to such attacks. Wachtell did not immediately respond to a Reuters request for comment.
Wachtell’s proposal would reinstate the ban imposed at
. Short selling was temporarily banned in the U.S. during the financial crisis, but a subsequent review by the New York Fed showed the restrictions had not had the desired effect.
The SEC is “not currently considering” a short-selling ban, the agency official said Wednesday, as concerns about the bank’s soundness hit stock prices.
The SEC declined to comment on Thursday when asked whether it should impose a ban on short selling.
Still, U.S. federal and state officials are assessing the possibility of “market manipulation,” according to a person familiar with the matter. The reasons behind the large fluctuations in stock prices.
SEC Chairman Gary Gensler also told Reuters that the SEC’s focus is on identifying and prosecuting any violations that could threaten investors, capital formation or the broader market. form of misconduct.
Reuters reported last month that many hedge funds were gaining high as First Republic, Silicon Valley Bank (SVB) and 10052 Signature Bank (OTC: 500 NYSE