| Plexus Consulting Group | News Release | ||
| "Transparency
of Short Sale Reporting" |
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Washington, D.C. – September 20, 2006 Mr. Chepucavage’s presentation described a growing demand for daily naked short sale reporting and referenced a number of sources which have argued that accurate and timely information for investors is essential for a fair and efficient securities market with respect to the SEC’s approach to short selling. False or misleading reports discourage long-term investors from committing their funds to companies, which may damage these companies access to the equity market for new capital. Small companies are especially vulnerable to naked short selling, seeing that they usually do not have resources to start a big P.R. campaign, but also because they may not be well-known among the financial press and professionals that would usually in such cases be able to correct the hearsay. As noted by Mr.Chepucavage there remains a unique vacuum in the disclosure
of short sales at a time when the public is extremely concerned about
naked short sales. Recent estimates suggest that short sales account
for over 25% of total volume and that the large investment banks get
25-50% of their profits from hedge funds. Yet the current disclosure
is misleading when it excludes arbitrage shorts and fails to disclose
naked shorts. It is arguably the sole area where the SEC and Congress
choose not to force disclosure of material information. Indeed the Commission
did not ask for comment on disclosure in the concept release and proposed
rule leading up to Reg SHO. It is only the state of Utah that has ventured
into disclosure territory. There is little explanation for non-disclosure
of the naked shorts occurring for each issuer especially when they are
available through an FOIA request and to industry insiders. Furthermore
there is no recent SEC discussion to explain their reluctance to do
so. About Plexus Consulting Group, LLC Plexus Consulting Group is a management-consulting firm that provides marketing, management, and strategic planning services to association, for-profit, and governmental entities in North America, Europe, Latin America, and Asia. Plexus’s network of affiliate offices covers all these markets. The firm is headed by Steven Worth-a 25-year consulting veteran whose former professional titles include: Director of International Public Affairs and Communications, Deloitte, Touche, Tohmatsu; Managing Director of Hill and Knowlton Brussels, and Press Liaison for the U.S. Senate Majority Leader’s office. For more information, contact: |
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