Why are these companies still in business?
Why aren't their executive wearing orange jumpsuits?
No wonder U.S. stocks have surged but retail investors have made peanuts.
Where is Eric Holder?
WASHINGTON — Twenty-two investment firms are paying a total of $14.4 million to settle federal charges of improperly short-selling certain stocks and buying them soon after in public offerings.
The Securities and Exchange Commission announced the settlements Tuesday. One of the best-known is the hedge fund D.E. Shaw & Co., which agreed to pay $465,986 in restitution plus interest and a $201,506 penalty.
Short-selling is a bet that a stock will lose value. Short-sellers borrow shares and agree to sell them in hopes that the share price will fall. They can then buy the shares at a lower price, return them to the lender and pocket the difference.
SEC rules prohibit short-selling a stock in the five business days before a public offering and then buying that stock in the offering.
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