Short Selling Comes Under Fire Amid Bank Turmoil
U.S. bankers want federal regulators to investigate the short-selling of financial institutions as regional banks get clobbered in the stock market.
The American Bankers Association (ABA) penned a May 4 letter to Securities and Exchange Commission (SEC) chair Gary Gensler, requesting that the regulatory body probe the substantial short sales of bank stocks that the lobby group says were “disconnected from the underlying financial realities.”
Rob Nichols, the president and CEO of the ABA, confirmed that his organization’s members had seen significant short sales of equity securities since the two failures of Silicon Valley Bank and Signature Bank.
Nichols noted that the ABA accepts that short selling is a “legitimate and important financial tool,” but warned that it can be a mechanism that can “distort the markets through manipulation and abuse.”…