Goldman Sach is at it again. Short selling. Poof..... More money gone.
UPDATE 1-U.S. firms oppose rules to curb short selling
* Goldman Sachs, Vanguard Group among those opposed
* SEC asked for comment on 'uptick' rule (Updates source of story; adds details, background and comments)
NEW YORK, Sept 29 (Reuters) - Goldman Sachs Group Inc (GS.N) and Vanguard Group Inc are among U.S. companies opposed to rules proposed by U.S. regulators to limit short selling, according to letters filed by the companies.
The U.S. Securities and Exchange Commission had asked for comments on a proposal to reinstate the "uptick" rule, under which investors can short a stock only after it had moved higher.
In a short sale, an investor sells borrowed stock in anticipation of a price decline that will allow him to repurchase the shares at a lower price.
Some lawmakers and financial industry executives say short selling has worsened the financial crisis and driven down share prices. [ID:nN174026]
Goldman and Vanguard were among several companies and exchange operators opposing new restrictions on short sales.
"[T]he available empirical data suggest that short selling may benefit the market by exposing financial misconduct and aligning market prices with fundamental analysis," Paul Russo, Goldman's head of U.S. equity trading, wrote in a comment latter to the SEC.
Other investors, including T.Rowe Price, submitted letters expressing support for the new rules.
"[W]e believe appropriate short selling serves a valid purpose and can enhance liquidity and price discovery," T.Rowe Price said in a letter signed by Michael Gitlin, head of global trading. "However, short selling has also been utilized as a device to manipulate stock prices in an abusive manner and has negatively impacted investor confidence." (Reporting by Steve Eder; additional reporting by Ajay Kamalakaran in Bangalore; Editing by Dan Lalor and John Wallace)