by Kris Sayce on November 7, 2008
We have no idea who Giovanni Spagnolo is. We don’t know whether he is a professional trader, a small investor, a fund manager or anything else.
But what we do know is the Australian Securities & Investment Commission (ASIC) has taken him to court for short selling. To be more precise, for naked short selling. You see, what Mr Spagnolo did was sell shares that he did not own. Furthermore, he didn’t borrow the stock from anyone in order to deliver it on settlement. That is what makes it a naked short sell.
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by Kris Sayce on September 23, 2008
So it should hardly have come to a surprise that once the UK and US introduced limited bans that the Australian market should follow. D’Aloisio must have been preparing himself to be the hero of the markets once the announcement was made on Friday evening. Acceptance speech prepared, there wouldn’t have been a dry eye in the house.
Then the bubble burst. Reading today’s papers you would think that the mainstream press, commentators and fund managers have been supportive of short selling all along. Almost every article is either critical of the ban or quotes those that are.
It didn’t help that ASIC managed to royally stuff things up. To the extent that the ASX had to delay the market open yesterday while ASIC released a clarification of the new rules.
Bearing in mind who principally does short selling – larger or more sophisticated investors and institutions – banning the practice on the ASX will probably only have minimal effect.
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