“SEC Takes Emergency Action in Response to Market Crisis”

On September 19, 2008, the Securities and Exchange Commission announced it was taking further emergency action to curb short selling in an effort to “protect the integrity and quality of the securities market and strengthen investor confidence.” Specifically, the SEC issued a temporary emergency order, effective immediately, prohibiting short selling with respect to the securities of 799 financial companies. SEC Chairman Christopher Cox stated that “the emergency order is . . . part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury, and the Congress.” The SEC has also announced additional action this week with respect to both short sales and the repurchase of securities under Rule 10b-18, to address the recent market turmoil.