UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 34-58592 / September 18, 2008
EMERGENCY ORDER PURSUANT TO SECTION 12(k)(2) OF THE SECURITIES
EXCHANGE ACT OF 1934 TAKING TEMPORARY ACTION TO RESPOND TO
MARKET DEVELOPMENTS
The Commission is aware of the continued potential of sudden and excessive
fluctuations of securities prices and disruption in the functioning of the securities markets
that could threaten fair and orderly markets. In our recent publication of an emergency
order under Section 12(k) of the Exchange Act (the “Act”),1 for example, we were
concerned about the possible unnecessary or artificial price movements based on
unfounded rumors regarding the stability of financial institutions and other issuers
exacerbated by “naked” short selling. Our concerns, however, are no longer limited to
just the financial institutions that were the subject of the July Emergency Order. Recent
market conditions have made us concerned that short selling in the securities of a wider
range of financial institutions may be causing sudden and excessive fluctuations of the
prices of such securities in such a manner so as to threaten fair and orderly markets.
Given the importance of confidence in our financial markets as a whole, we have
become concerned about recent sudden declines in the prices of a wide range of
securities. Such price declines can give rise to questions about the underlying financial
condition of an issuer, which in turn can create a crisis of confidence, without a
fundamental underlying basis. This crisis of confidence can impair the liquidity and
1
See Exchange Act Release No. 58166 (July 15, 2008). See also Exchange Act
Release No. 58190 (July 18, 2008) (“Amended July Emergency Order”). See also
Exchange Act Release No. 58572 (September 17, 2008).
1
ultimate viability of an issuer, with potentially broad market consequences. Our concerns
are no longe