US SEC changes rule to prevent abusive short sales

(Reuters) - Short sellers try to profit from a falling stock price by
borrowing shares, selling them high and later buying them back
at a lower price, then returning them to the lender and taking
as profit the difference between the sale and repurchase
prices.




The amended rule would prohibit a person who shorts stock
during the restricted period before a secondary offering from
buying any securities in the offering.
"This proposal was triggered by persistent noncompliance with
the rule and a string of strategies to conceal the prohibited
covering," the SEC said.


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