SEC halts short selling through order

[Sapphire Capital]

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

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).

ultimate viability of an issuer, with potentially broad market consequences. Our concerns
are no longer limited to the financial institutions that were the subject of the July
Emergency Order.
As a result of these recent developments, the Commission has concluded that
there continues to exist the potential of sudden and excessive fluctuations of securities
prices generally and disruption in the functioning of the securities markets that could
threaten fair and orderly markets. Based on this conclusion, the Commission is
exercising its powers under Section 12(k)(2) of the Act. 2 Pursuant to Section 12(k)(2), in
appropriate circumstances the Commission may issue summarily an order to alter,
supplement, suspend, or impose requirements or restrictions with respect to matters or
actions subject to regulation by the Commission if the Commission determines such an
order is necessary in the public interest and for the protection of investors to maintain or
restore fair and orderly securities markets.
In these unusual and extraordinary circumstances, we have concluded that, to
prevent substantial disruption in the securities markets, temporarily prohibiting any
person from effecting a short sale in the publicly traded securities of certain financial
firms, which entities are identified in Appendix A (“Included Financial Firms”), is in the
public interest and for the protection of investors to maintain or restore fair and orderly
securities markets.

This finding of an “emergency” is solely for purposes of Section 12(k)(2) of the
Exchange Act and is not intended to have any other effect or meaning or to confer
any right or impose any obligation other than set forth in this Order.

This emergency action should prevent short selling from being used to drive down
the share prices of issuers even where there is no fundamental basis for a price decline
other than general market conditions.
IT IS ORDERED that, pursuant to our Section 12(k)(2) powers, all persons are
prohibited from short selling 3 any publicly traded securities of any Included Financial
Firm.
Similar to the Amended July Emergency Order, we are providing a limited
exception for certain bona fide market makers. We believe this narrow exception is
necessary because such market makers may need to facilitate customer orders in a fast
moving market without possible delays associated with complying with the requirements
of this Order.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the following entities are excepted from the requirements of the Order: registered market
makers, block positioners, or other market makers obligated to quote in the over-the-
counter market, in each case that are selling short a publicly traded security of an
Included Financial Firm as part of bona fide market making in such security.
In addition, we are providing an exception to allow short sales that occur as a
result of automatic exercise or assignment of an equity option held prior to effectiveness
of this Order due to expiration of the option.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the requirements of this Order shall not apply to any person that effects a short sale in any

The definition of “short sale” shall be the same definition used in Rule 200(a) of
Regulation SHO and the requirements for marking orders “long” or “short” shall
be the same as provided in Regulation SHO.

publicly traded security of any Included Financial Firm as a result of automatic exercise
or assignment of an equity option held prior to effectiveness of this Order due to
expiration of the option.
Finally, to facilitate the expiration of options on September 20th, options market
makers are excepted from the requirements of this Order until 11:59 p.m. on September
19th when selling short as part of bona fide market making and hedging activities related
directly to bona fide market making in derivatives on the publicly traded securities of any
Included Financial Firm.
IT IS THEREFORE ORDERED that, pursuant to our Section 12(k)(2) powers,
the requirements of this Order shall not apply, until 11:59 p.m. on September 19, 2008, to
any person that is a market maker that effects a short sale as part of a bona fide market
making and hedging activity related directly to bona fide market making in derivatives on
the publicly traded securities of any Included Financial Firm.
This Order shall be effective immediately and shall terminate at 11:59 p.m. EDT
on October 2, 2008, unless further extended by the Commission.
By the Commission.
Florence E. Harmon
Acting Secretary

Appendix A
This list, prepared on a best efforts basis, includes banks, insurance companies, and
securities firms identified by SICs 6000, 6011, 6020-22, 6025, 6030, 6035-36, 6111,
6140, 6144, 6200, 6210-11, 6231, 6282, 6305, 6310-11, 6320-21, 6324, 6330-31, 6350-
51, 6360-61, 6712, and 6719.
AAME ATLANTIC AMERICAN CORP
ABIGAIL ADAMS NATL BANCORP
INC
AANB
ABBC ABINGTON BANCORP INC PA
ABCB AMERIS BANCORP
ABCW ANCHOR BANCORP WISCONSIN INC
ABK AMBAC FINANCIAL GROUP INC
ABNJ AMERICAN BANCORP OF NJ INC
ABVA ALLIANCE BANKSHARES CORP
AMERICAN PHYSICIANS CAPITAL
ACAP INC
AMERICAN COMMUNITY BNCSHRS
ACBA INC
ACE ACE LTD
ACFC ATLANTIC COAST FED CORP
ACGL ARCH CAPITAL GROUP LTD NEW
ADVNA ADVANTA CORP
ADVNB ADVANTA CORP
AEG AEGON N V
AMERICAN EQUITY INVT LIFE HLDG
AEL C
AET AETNA INC NEW
AF ASTORIA FINANCIAL CORP
AFFIRMATIVE INSURANCE HLDGS
AFFM INC
AMERICAN FINANCIAL GROUP INC
AFG NEW
AFL A F L A C INC
AGII ARGO GROUP INTL HLDGS LTD
AGO ASSURED GUARANTY LTD
AGP AMERIGROUP CORP
AGX ARGAN INC
AHD ATLAS PIPELINE HOLDINGS L P
AHL ASPEN INSURANCE HOLDINGS LTD
AIB ALLIED IRISH BANKS PLC
AIG AMERICAN INTERNATIONAL GROUP INC
AINV APOLLO INVESTMENT CORP
AIZ ASSURANT INC
ALL ALLSTATE CORP
ALLB ALLIANCE BANCORP INC PA
ALNC ALLIANCE FINANCIAL CORP NY
AMCP AMCOMP INC NEW
AMFI AMCORE FINANCIAL INC
AMG AFFILIATED MANAGERS GROUP INC
AMIC AMERICAN INDEPENDENCE CORP
AMERICAN NATIONAL
AMNB BANKSHARES INC
AMP AMERIPRISE FINANCIAL INC
AMPH AMERICAN PHYSICIANS SVC GROUP
AMRB AMERICAN RIVER BANKSHARES
AMSF AMERISAFE INC
AMTD T D AMERITRADE HOLDING CORP
ANAT AMERICAN NATIONAL INS CO
ANNB ANNAPOLIS BANCORP INC
AOC AON CORP
APAB APPALACHIAN BANCSHARES INC
AROW ARROW FINANCIAL CORP
ASBI AMERIANA BANCORP
ASFI ASTA FUNDING INC
ATLANTIC SOUTHERN FINL GROUP
ASFN INC
ASRV AMERISERV FINANCIAL INC
ATBC ATLANTIC BANCGROUP INC
ATLO AMES NATL CORP
AUBN AUBURN NATIONAL BANCORP
AMERICAN WEST
AWBC BANCORPORATION
ALLIED WORLD ASSUR CO HLDGS
AWH LTD
AXA A X A UAP
ATLAS ACQUISITION HOLDINGS
AXG CORP
AXS AXIS CAPITAL HOLDINGS LTD
BAC BANK OF AMERICA CORP
BANF BANCFIRST CORP
BANR BANNER CORP
BARI BANCORP RHODE ISLAND INC
BAYN BAY NATIONAL CORP
BBNK BRIDGE CAPITAL HOLDINGS
BBT B B & T CORP
BBX BANKATLANTIC BANCORP INC
BCA CORPBANCA
BCAR BANK OF THE CAROLINAS CORP
BCBP B C B BANCORP INC
BCP BROOKE CAPITAL CORP
BCS BARCLAYS PLC
BCSB B C S B BANCORP INC
BDGE BRIDGE BANCORP INC
BEN FRANKLIN RESOURCES INC
BERK BERKSHIRE BANCORP INC DEL
BFF B F C FINANCIAL CORP
BFIN BANKFINACIAL CORP
BEACH FIRST NATL BANCSHARES
INC
BFNB
BHB BAR HARBOR BANKSHARES
BHBC BEVERLY HILLS BANCORP INC
BHLB BERKSHIRE HILLS BANCORP INC
BK BANK OF NEW YORK MELLON CORP
BKBK BRITTON & KOONTZ CAPITAL CORP
BKMU BANK MUTUAL CORP NEW
OAK RIDGE FINANCIAL SERVICES
BKOR INC
BKSC BANK SOUTH CAROLINA CORP
BKUNA BANKUNITED FINANCIAL CORP
BANCO LATINOAMERICANO DE EXP
BLX SA
BMRC BANK OF MARIN BANCORP
BMTC BRYN MAWR BANK CORP
BNCL BENEFICIAL MUTUAL BANCORP INC
BNCN B N C BANCORP
BNS BANK OF NOVA SCOTIA
BNV BEVERLY NATIONAL CORP
BOCH BANK OF COMMERCE HOLDINGS
BOFI B OF I HOLDING INC
BOFL BANK OF FLORIDA CORP NAPLES
BOH BANK OF HAWAII CORP
BOKF B O K FINANCIAL CORP
BOMK BANK MCKENNEY VA
BOVA BANK OF VIRGINIA
BPFH BOSTON PRIVATE FINL HLDS INC
BROADPOINT SECURITIES GROUP
BPSG INC
BRK BERKSHIRE HATHAWAY INC DEL
BRK BERKSHIRE HATHAWAY INC DEL
BRKL BROOKLINE BANCORP INC
BSRR SIERRA BANCORP
BTFG BANCTRUST FINANCIAL GROUP INC
BUSE FIRST BUSEY CORP
BWINA BALDWIN & LYONS INC
BWINB BALDWIN & LYONS INC
BX BLACKSTONE GROUP L P
BXS BANCORPSOUTH INC
BYFC BROADWAY FINANCIAL CORP DEL
C CITIGROUP INC
CAC CAMDEN NATIONAL CORP
CACB CASCADE BANCORP
CADE CADENCE FINANCIAL CORP
CAFI CAMCO FINANCIAL CORP
CAPB CAPITALSOUTH BANCORP
CAPE CAPE FEAR BANK CORP
CART CAROLINA TRUST BANK
CARV CARVER BANCORP INC
CASB CASCADE FINANCIAL CORP
CASH META FINANCIAL GROUP INC
CATY CATHAY GENERAL BANCORP
CB CHUBB CORP
CBAN COLONY BANKCORP INC
CBBO COLUMBIA BANCORP ORE
CBC CAPITOL BANCORP LTD
COMMUNITY BANK SHRS INDIANA
CBIN INC
CBKN CAPITAL BANK CORP NEW
CBNK CHICOPEE BANCORP INC
CBON COMMUNITY BANCORP
CBU COMMUNITY BANK SYSTEM INC
CCBD COMMUNITY CENTRAL BANK CORP
CCBG CAPITAL CITY BANK GROUP
CCBP COMM BANCORP INC
CCFH C C F HOLDING COMPANY
CCNE C N B FINANCIAL CORP PA
CCOW CAPITAL CORP OF THE WEST
CEBK CENTRAL BANCORP INC
CFBK CENTRAL FEDERAL CORP
CFFC COMMUNITY FINANCIAL CORP
CFFI C & F FINANCIAL CORP
CFFN CAPITOL FEDERAL FINANCIAL
CFNL CARDINAL FINANCIAL CORP
CFR CULLEN FROST BANKERS INC
CHCO CITY HOLDING CO
CHEV CHEVIOT FINANCIAL CORP
CHFC CHEMICAL FINANCIAL CORP
CI C I G N A CORP
CIA CITIZENS INC
CINF CINCINNATI FINANCIAL CORP
CITZ C F S BANCORP INC
CIZN CITIZENS HOLDING CO
CJBK CENTRAL JERSEY BANCORP
CLBH CAROLINA BANK HOLDINGS INC
CLFC CENTER FINANCIAL CORP
CALAMOS ASSET MANAGEMENT
INC
CLMS
CMA COMERICA INC
CME C M E GROUP INC
CMFB COMMERCEFIRST BANCORP INC
CMGI C M G I INC
CMSB C M S BANCORP INC
CNA C N A FINANCIAL CORP
CNAF COMMERCIAL NATIONAL FINL CORP
CNB COLONIAL BANCGROUP INC
CNBC CENTER BANCORP INC
CNBKA CENTURY BANCORP INC
CNC CENTENE CORP DEL
COMMUNITY NATL BANK LAKEWAY
CNLA AREA
CNO CONSECO INC
CNS COHEN & STEERS INC
PENNSYLVANIA COMMERCE
COBH BANCORP IN
COBZ COBIZ FINANCIAL INC
COLB COLUMBIA BANKING SYSTEM INC
COOP COOPERATIVE BANCSHARES INC
CORS CORUS BANKSHARES INC
COWN COWEN GROUP INC
CPBC COMMUNITY PARTNERS BANCORP
CPBK COMMUNITY CAPITAL CORP
CPF CENTRAL PACIFIC FINANCIAL CORP
CPHL CASTLEPOINT HOLDINGS LTD
CRBC CITIZENS REPUBLIC BANCORP INC
CRFN CRESCENT FINANCIAL CORP
CRMH C R M HOLDINGS LTD
CRRB CARROLLTON BANCORP
CRVL CORVEL CORP
CITIZENS SOUTH BANKING CORP
CSBC DEL
CSBK CLIFTON SAVINGS BANCORP INC
CENTERSTATE BANKS OF FLORIDA
CSFL INC
CSHB COMMUNITY SHORES BANK CORP
CSNT CRESCENT BANKING CO
CTBC CONNECTICUT BANK & TRUST CO
CTBI COMMUNITY TRUST BANCORP INC
CITYBANK LYNNWOOD
CTBK WASHINGTON
CTZN CITIZENS FIRST BANCORP INC
CVBF C V B FINANCIAL CORP
CENTRAL VIRGINIA BANKSHARES
INC
CVBK
CVCY CENTRAL VALLEY COMM BANCORP
CVH COVENTRY HEALTH CARE INC
CVLL COMMUNITY VALLEY BANCORP
CVLY CODORUS VALLEY BANCORP INC
CWBC COMMUNITY WEST BANCSHARES
COMMONWEALTH BANKSHARES
CWBS INC
CWLZ COWLITZ BANCORPORATION
CZFC CITIZENS FIRST CORP
CZWI CITIZENS CMNTY BANCORP INC MD
DB DEUTSCHE BANK AG
DCOM DIME COMMUNITY BANCSHARES
DEAR DEARBORN BANCORP INC
DFG DELPHI FINANCIAL GROUP INC
DGICA DONEGAL GROUP INC
DGICB DONEGAL GROUP INC
DIAMOND HILL INVESTMENT GRP
DHIL INC
DLLR DOLLAR FINANCIAL CORP
DARWIN PROFESSIONAL
DR UNDERWRITERS
DSL DOWNEY FINANCIAL CORP
DUF DUFF & PHELPS CORP NEW
MERIDIAN INTERSTATE BANCORP
EBSB INC
EBTX ENCORE BANCSHRES INC
ECBE E C B BANCORP INC
EGBN EAGLE BANCORP INC
EASTERN INSURANCE HOLDINGS
EIHI INC
ENERGY INFRASTRUCTURE ACQUI
EII CORP
EMCI E M C INSURANCE GROUP INC
EMITF ELBIT IMAGING LTD
ENDURANCE SPECIALTY HOLDINGS
ENH LTD
ESBF E S B FINANCIAL CORP
ESBK ELMIRA SAVINGS BANK FSB NY
10
ESGR ENSTAR GROUP LTD
ETFC E TRADE FINANCIAL CORP
EV EATON VANCE CORP
EVBN EVANS BANCORP INC
EASTERN VIRGINIA BANKSHARES INC
EVBS
EVR EVERCORE PARTNERS INC
EWBC EAST WEST BANCORP INC
FABK FIRST ADVANTAGE BANCORP
FAC FIRST ACCEPTANCE CORP
FAF FIRST AMERICAN CORP CALIF
FBC FLAGSTAR BANCORP INC
FBCM F B R CAPITAL MARKETS CORP
FBIZ FIRST BUSINESS FINL SVCS INC
FBMI FIRSTBANK CORP
FBMS FIRST BANCSHARES INC MS
FBNC FIRST BANCORP NC
FBP FIRST BANCORP P R
FBSI FIRST BANCSHARES INC MO
FBSS FAUQUIER BANKSHARES INC
FBTC FIRST BANCTRUST
FCAL FIRST CALIFORNIA FINL GROUP INC
FCAP FIRST CAPITAL INC
FIRST COMMUNITY BANCSHARES
FCBC INC
FCCO FIRST COMMUNITY CORP SC
FCCY 1ST CONSTITUTION BANCORP
FIRST COMMUNITY BANK CORP
FCFL AMER
FIRST CITIZENS BANCSHARES INC
FCNCA NC
FCVA FIRST CAPITAL BANCORP INC VA
FCZA FIRST CITIZENS BANC CORP
FDEF FIRST DEFIANCE FINANCIAL CORP
FDT FEDERAL TRUST CORP
FED FIRSTFED FINANCIAL CORP
FFBC FIRST FINANCIAL BANCORP OHIO
FIRST FEDERAL BANCSHARES ARK
FFBH INC
FFCH FIRST FINANCIAL HOLDINGS INC
FFCO FEDFIRST FINANCIAL CORP
FFDF F F D FINANCIAL CORP
FFFD NORTH CENTRAL BANCSHARES INC
FFG F B L FINANCIAL GROUP INC
FFH FAIRFAX FINL HOLDINGS LTD
FFHS FIRST FRANKLIN CORP
FFIC FLUSHING FINANCIAL CORP
FFIN FIRST FINANCIAL BANKSHARES INC
FFKT FARMERS CAPITAL BANK CORP
FFKY FIRST FINANCIAL SERVICE CORP
FIRST FED NORTHN MI BANCORP INC
FFNM
FFNW FIRST FINANCIAL NORTHWEST INC
FIRST FEDERAL BANKSHARES INC
FFSX DEL
FHN FIRST HORIZON NATIONAL CORP
FIFG 1ST INDEPENDENCE FNL GROUP INC
FORTRESS INVESTMENT GROUP L L C
FIG
FII FEDERATED INVESTORS INC PA
FISI FINANCIAL INSTITUTIONS INC
FKFS FIRST KEYSTONE FINANCIAL INC
FLIC FIRST LONG ISLAND CORP
FMAR FIRST MARINER BANCORP
FMBI FIRST MIDWEST BANCORP DE
FMER FIRSTMERIT CORP
FMFC FIRST M & F CORP
FNB F N B CORP PA
FNBN F N B UNITED CORP
FIRST NIAGARA FINL GROUP INC
FNFG NEW
FNLC FIRST BANCORP INC ME
FEDERAL NATIONAL MORTGAGE
FNM ASSN
FIRST NATIONAL BANCSHARES INC
FNSC SC
FPBI F P B BANCORP INC
FPBN 1ST PACIFIC BANCORP CA
FPFC FIRST PLACE FINANCIAL CORP NM
FPIC F P I C INSURANCE GROUP INC
FPTB FIRST PACTRUST BANCORP INC
FRBK REPUBLIC FIRST BANCORP INC
FEDERAL HOME LOAN MORTGAGE
FRE CORP
FRGB FIRST REGIONAL BANCORP
FRME FIRST MERCHANTS CORP
FSBI FIDELITY BANCORP INC
FSBK FIRST SOUTH BANCORP INC
FSGI FIRST SECURITY GROUP INC
FSNM FIRST STATE BANCORPORATION
FTBK FRONTIER FINANCIAL CORP
FULT FULTON FINANCIAL CORP PA
FUNC FIRST UNITED CORP
FWV FIRST WEST VIRGINIA BANCORP INC
FXCB FOX CHASE BANCORP INC
GABC GERMAN AMERICAN BANCORP INC
GAN GAINSCO INC
GBCI GLACIER BANCORP INC NEW
GBH GREEN BUILDERS INC
GBL GAMCO INVESTORS INC
GBNK GUARANTY BANCORP
GBTS GATEWAY FINANCIAL HLDGS INC
GLOBAL CASH ACCESS HOLDINGS
GCA INC
GUARANTY FEDERAL BANCSHARES
GFED INC
GFIG G F I GROUP INC
GFLB GREAT FLORIDA BANK
GGAL GRUPO FINANCIERO GALICIA S A
GHL GREENHILL & CO INC
GIW WILBER CORP
GLBZ GLEN BURNIE BANCORP
GLRE GREENLIGHT CAPITAL RE LTD
GNW GENWORTH FINANCIAL INC
GOV GOUVERNEUR BANCORP INC
GRAN BANK GRANITE CORP
GRNB GREEN BANKSHARES INC
GROW U S GLOBAL INVESTORS INC
GS GOLDMAN SACHS GROUP INC
GSBC GREAT SOUTHERN BANCORP INC
GSLA G S FINANCIAL CORP
GTS TRIPLE S MANAGEMENT CORP
HABC HABERSHAM BANCORP INC
HAFC HANMI FINANCIAL CORP
HALLMARK FINANCIAL SERVICES
HALL INC
HARLEYSVILLE SAVINGS FINAN
HARL CORP
HAXS HEALTHAXIS INC
HBAN HUNTINGTON BANCSHARES INC
HBHC HANthingy HOLDING CO
HBNK HAMPDEN BANCORP INC
HBOS HERITAGE FINANCIAL GROUP
HCBK HUDSON CITY BANCORP INC
HCC H C C INSURANCE HOLDINGS INC
HEOP HERITAGE OAKS BANCORP
HFBC HOPFED BANCORP INC
HFFC H F FINANCIAL CORP
HFWA HERITAGE FINANCIAL CORP WA
HGIC HARLEYSVILLE GROUP INC
HINGHAM INSTITUTION FOR SVGS
HIFS MA
HORACE MANN EDUCATORS CORP
NEW
HMN
HMNF H M N FINANCIAL INC
HMPR HAMPTON ROADS BANKSHARES INC
HNBC HARLEYSVILLE NATIONAL CORP PA
HNT HEALTH NET INC
HOMB HOME BANCSHARES INC
HOME HOME FEDERAL BANCORP INC MD
HRZB HORIZON FINANCIAL CORP WASH
HS HEALTHSPRING INC
HTBK HERITAGE COMMERCE CORP
HTH HILLTOP HOLDINGS INC
HTLF HEARTLAND FINANCIAL USA INC
HUM HUMANA INC
HWBK HAWTHORN BANCSHARES INC
HARRINGTON WEST FINANCIAL GRP
HWFG IN
INTERNATIONAL ASSETS HLDG
IAAC CORP
IBCA INTERVEST BANCSHARES CORP
IBCP INDEPENDENT BANK CORP MICH
IBKC IBERIABANK CORP
IBKR INTERACTIVE BROKERS GROUP INC
IBNK INTEGRA BANK CORP
INTERNATIONAL BANCSHARES
IBOC CORP
ICE INTERCONTINENTALEXCHANGE INC
ICH INVESTORS CAPITAL HOLDINGS LTD
IFC IRWIN FINANCIAL CORP
INDEPENDENCE FEDERAL SAVINGS
IFSB BK
IHC INDEPENDENCE HOLDING CO NEW
IMP IMPERIAL CAPITAL BANCORP INC
INCB INDIANA COMMUNITY BANCORP
INDB INDEPENDENT BANK CORP MA
ING I N G GROEP N V
INFINITY PROPERTY & CASUALTY
IPCC COR
IPCR I P C HOLDINGS LTD
IRE IRELAND BANK
ITC I T C HOLDINGS CORP
ITG INVESTMENT TECHNOLOGY GP INC
NEW ITIC INVESTORS TITLE CO
JAXB JACKSONVILLE BANCORP INC FL
JEF JEFFERIES GROUP INC NEW
JFBC JEFFERSONVILLE BANCORP
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JLI JESUP & LAMONT INC
JMP J M P GROUP INC
JNS JANUS CAP GROUP INC
JPM JPMORGAN CHASE & CO
JXSB JACKSONVILLE BANCORP INC
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KEY KEYCORP NEW
KFED K FED BANCORP
KENTUCKY FIRST FEDERAL
KFFB BANCORP
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KFS INC
KRNY KEARNY FINANCIAL CORP
L LOEWS CORP
LAB LABRANCHE & CO INC
LABC LOUISIANA BANCORP INC
LARK LANDMARK BANCORP INC
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LFC CHINA LIFE INSURANCE CO LTD
LION FIDELITY SOUTHERN CORP NEW
LKFN LAKELAND FINANCIAL CORP
LNC LINCOLN NATIONAL CORP IN
LNCB LINCOLN BANCORP IND
LPSB LAPORTE BANCORP INC
LSBI L S B FINANCIAL CORP
LSBK LAKE SHORE BANCORP INC
LSBX L S B CORP
LADENBURG THALMANN FIN SVCS
LTS INC
LUK LEUCADIA NATIONAL CORP
LYG LLOYDS TSB GROUP PLC
MAIN MAIN STREET CAPITAL CORP
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MBFI M B FINANCIAL INC NEW
MBHI MIDWEST BANC HOLDINGS INC
MBI M B I A INC
MBP MID PENN BANCORP INC
MBR MERCANTILE BANCORP INC
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MBWM MERCANTILE BANK CORP
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MGYR MAGYAR BANCORP INC
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MIG GROUP INC
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MKL MARKEL CORP
MKTX MARKETAXESS HLDGS INC
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MNRK INC
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MOFG NEW
MOH MOLINA HEALTHCARE INC
MORN MORNINGSTAR INC
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MSFG INC
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NCC NATIONAL CITY CORP
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NEBS NEW ENGLAND BANCSHARES INC
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NECB INC
NEWT NEWTEK BUSINESS SVCS INC
NFBK NORTHFIELD BANCORP INC
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NFS IN
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NKSH NATIONAL BANKSHARES INC
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NRIM NORTHRIM BANCORP INC
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NSFC CORP
NSH NUSTAR G P HOLDINGS LLC
NTQ N T R ACQUISITION CO
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NVSL NAUGATUCK VLY FINANCIAL CORP
NWFL NORWOOD FINANCIAL CORP
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UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 58591 / 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. As evidenced by our recent publication of
emergency orders under Section 12(k) of the Securities Exchange Act of 1934
(“Exchange Act”),1 we are concerned about the possible unnecessary or artificial price
movements based on unfounded rumors regarding the stability of financial institutions
and other issuers exacerbated by short selling. We also believe that some persons may
take advantage of issuers that have become temporarily weakened by current market
conditions to engage in inappropriate short selling in the securities of such issuers.
Given the importance of confidence in our financial markets as a whole, we have
become concerned about sudden and unexplained declines in the prices 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 ultimate viability
of an issuer, with potentially broad market consequences.
1
See Exchange Act Release No. 58166 (July 15, 2008), Exchange Act Release No. 58572
(September 17, 2008).
As a result of these recent developments, the Commission concluded that there
continues to exist the potential of sudden and excessive fluctuations of securities prices
generally and disruption in the functioning of the securities markets that could threaten
fair and orderly markets. Based on this conclusion, the Commission is exercising its
powers under Section 12(k)(2) of the Exchange Act.2 Pursuant to Section 12(k)(2), in
appropriate circumstances the Commission may by order summarily take action to alter,
supplement, suspend, or impose requirements or restrictions with respect to matters or
actions subject to regulation by the Commission.
We have concluded that it is necessary to require certain institutional investment
managers to report information concerning daily short sales of securities. For purposes of
this Order, we believe that section 13(f) of the Exchange Act and Rule 13f-1 provide
useful and tested terms and definitions that provide a basis for requiring new disclosure.
The Order therefore requires that an institutional investment manager that exercises
investment discretion3 with respect to accounts holding section 13(f) securities4 having an
aggregate fair market value on the last trading day of any month of any calendar year of
at least $100,000,000 must file a new form with the Commission. Specifically, an
institutional investment manager who has filed or was required to file a Form 13F for the
calendar quarter ended June 30, 2008 under section 13(f) of the Exchange Act and Rule
13f-1(a) thereunder will be required to file a report on new Form SH with the
2
This finding of an “emergency” is solely for purposes of Section 12(k)(2) of the Exchange Act and
is not intended to have any other effect or meaning or to confer any right or impose any obligation
other than set forth in this Order.
3
The term “investment discretion” has the same meaning as in Exchange Act Rule 13f-1(b). See
17 CFR § 240.13f-1(b).
4
The term “section 13(f) securities” has the same meaning as in Exchange Act Rule 13f-1(c). See
17 CFR § 240.13f-1(c).
2
Commission on the first business day5 of every calendar week immediately following a
week in which it effected short sales.
The Form SH, which must be filed electronically and will be publicly available on
our EDGAR system,6 must include disclosure of the number and value of securities sold
short for each section 13(f) security, except for short sales in options, and the opening
short position, closing short position, largest intraday short position, and the time of the
largest intraday short position, for that security during each calendar day of the prior
week. No filing, however, will be required when no short sales of a section 13(f) security
have been effected since the previous filing of a Form SH. In addition, this disclosure
requirement will only apply to short sales effected after the effective date of the Order.
Finally, an institutional investment manager need not report short positions otherwise
reportable if: (i) the short position in the section 13(f) securities constitutes less than one-
quarter of one per cent of the class of the issuer’s section 13(f) securities issued and
outstanding as reported on the issuer’s most recent annual or quarterly report, and any
current report subsequent thereto, filed with the Commission pursuant to the Exchange
Act, unless the manager knows or has reason to believe the information contained therein
is inaccurate; and (ii) the fair market value of the short position in the section 13(f)
securities is less than $1,000,000.
We believe that the extraordinary circumstances we now confront require the
new disclosure requirements we are imposing today. We also believe such disclosure
5
See Exchange Act Rule 0-2 for a description of the business hours of the Commission. 17 CFR §
240.0-2.
6
No Commission procedure for seeking confidential treatment of information filed with or
transmitted to the Commission, such as those in 17 C.F.R. §§ 200.80, 200.83, or 240.24b-2, shall apply to
the information that this Order requires to be filed.
3
requirements are in the public interest for the protection of investors and will ensure
transparency in short selling.
IT IS ORDERED that, pursuant to our Section 12(k)(2) powers:
Every institutional investment manager that exercises investment discretion with
respect to accounts holding section 13(f) securities and that has filed or was
required to file a Form 13F for the calendar quarter ended June 30, 2008, as
required under section 13(f) of the Exchange Act and Rule 13f-1(a) thereunder,
must file a report on Form SH with the Commission. The Form SH filing must be
made on the first business day of each week immediately following a week in
which the institutional investment manager has effected any short sale with
respect to any section 13(f) security that is not an option. With respect to each
section 13(f) security that is not an option, the Form SH filing must reflect the
number and value of securities sold short during the day as well as the opening
short position, closing short position, largest intraday short position, and the time
of the largest intraday short position, for that security on each calendar day of the
prior week in which the institutional investment manager engaged in trading
activity with respect to short sales.
Finally, an institutional investment manager need not report short positions
otherwise reportable if: (i) the short position in the section 13(f) securities
constitutes less than one-quarter of one per cent of the class of the issuer’s section
13(f) securities issued and outstanding as reported on the issuer’s most recent
annual or quarterly report, and any current report subsequent thereto, filed with
the Commission pursuant to the Exchange Act, unless the manager knows or has
reason to believe the information contained therein is inaccurate; and (ii) the fair
market value of the short position in the section 13(f) securities is less than
$1,000,000.
Short sale has the meaning set forth in Rule 200 of Regulation SHO (17 CFR §
242.200), and terms referenced in that provision shall have the same meaning as
set forth in Regulation SHO; and short positions to be reported are those resulting
from "short sales" as that term is defined in SEC Rule 200(a) of Regulation SHO.
IT IS FURTHER ORDERED that, pursuant to our Section 12(k)(2) powers, the
text of Form SH be as set forth in the attachment to this Order.
This Order shall be effective at 12:01 a.m. EDT on September 22, 2008, the first
Form SH shall be required to be filed on September 29, 2008, and this Order shall
terminate at 11:59 p.m. on October 2, 2008 unless further extended by the Commission.
4
By the Commission.
Lynn J. Taylor
Assistant Secretary
5

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SEC Issues New Rules to Protect Investors Against Naked Short Selling Abuses
FOR IMMEDIATE RELEASE
2008-204

Washington, D.C., Sept. 17, 2008 — The Securities and Exchange Commission today took several coordinated actions to strengthen investor protections against "naked" short selling. The Commission's actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.
Additional Materials

"These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling," said SEC Chairman Christopher Cox. "The Enforcement Division, the Office of Compliance Inspections and Examinations, and the Division of Trading and Markets will now have these weapons in their arsenal in their continuing battle to stop unlawful manipulation."

In an ordinary short sale, the short seller borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price). But in an abusive naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling conditions.

Today's Commission actions, which are the result of rulemaking under the Administrative Procedure Act, go beyond its previously issued emergency order, which was limited to the securities of financial firms with access to the Federal Reserve's Primary Dealer Credit Facility. Because the agency's exercise of its emergency authority is limited to 30 days, the previous order under Section 12(k)(2) of the Securities Exchange Act of 1934 expired on Aug. 12, 2008.

The Commission's actions were as follows:
Hard T+3 Close-Out Requirement; Penalties for Violation Include Prohibition of Further Short Sales, Mandatory Pre-Borrow

The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.

If a short sale violates this close-out requirement, then any broker-dealer acting on the short seller's behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer's activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.

Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.
Exception for Options Market Makers from Short Selling Close-Out Provisions in Reg SHO Repealed

The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(b)(3) in Regulation SHO. This rule change also becomes effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.

As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling.
Rule 10b-21 Short Selling Anti-Fraud Rule

The Commission adopted Rule 10b-21, which expressly targets fraudulent short selling transactions. The new rule covers short sellers who deceive broker-dealers or any other market participants. Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This rule also becomes effective at 12:01 a.m. ET on Thursday.

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www.sec.gov/rules/other/2008/34-58572.pdf