House acts to put end to 'naked short selling' bill
The House passed SB277 by a 67-7 vote. The Senate vote Friday was 27-1.
SB277 kills a bill passed last May that targeted illegal naked short selling through fines. Short sellers borrow shares hoping the share price declines so they can return shares to brokers and pocket the difference. In naked short selling, traders sell shares they haven't borrowed, using IOUs that brokers send through a stock clearinghouse. The brokers use IOUs until they can find shares to deliver, but the practice can lower a company's share price by artificially creating more sellers than buyers.
Senate Majority Leader Curt Bramble, R-Provo, said Friday that the special-session bill "was intended to get to the fraud that occurs and the damage to Utah publicly traded companies from the failure to deliver on illegal naked short selling."
But shortly after that bill's passage, the Securities Industry Association sued the state, saying federal law prohibited states from implementing recordkeeping requirements for brokers that are different from federal requirements. The state law required brokers to quickly and regularly disclose trades that fail to settle as scheduled. The association said that, while the bill supposedly targeted naked short selling, it also affected all short selling as well as other long-term investments that do not close as scheduled.
Bramble, the bill's sponsor, said Friday that advisers had told him Utah had little chance of winning the lawsuit. The House sponsor, Rep. Stephen Urquhart, R-St. George, echoed those comments Wednesday.
"The fact of the matter is, we have a law that probably will not stand judicial scrutiny because of federal pre-emption, and so we run the risk of not only would we lose that lawsuit, we would lose some of the state's other regulatory authorities and abilities to go with it," Urquhart said. He added, however, that the law has helped force the U.S. Securities and Exchange Commission to pay more attention to the issue.
But a few representatives wanted the new repealer bill delayed. Rep. Greg Hughes, R-Draper, moved to send it to the House Rules Committee and have it discussed in interim committee sessions.
"When we do heavy lifting, when we consider important policy, there's a process here. It might feel like drinking out of a fire hydrant, but it certainly is a deliberative one," he said. "Having a bill that is filed and brought to the (Senate) floor on the Friday before the end of the session and having a bill land on our laps on Day 43 has put many on an uphill battle in terms of trying to get their heads around this bill and this policy."
Comments
- Inmate stabbed in head during brawl 11:56 a.m.
- Cards' Pujols leads All-Star voting 11:52 a.m.
- Federer beats Roddick 11:51 a.m.
- Military ordered to turn back jet 11:44 a.m.
- US not stand in Israel's way on Iran 11:39 a.m.
- G-8 greeted skeptically by some 11:38 a.m.
- Deal on arms control expected 11:36 a.m.
- Yankees' Wang goes on DL 11:36 a.m.
- Swimmer Lezak skips Worlds 11:35 a.m.
- Initial bids due to buy The Boston Globe 11:34 a.m.
- Stadium of Fire lights up the 4th
- Millsap not franchise player
- Utahn reunites with officer
- Can Jazz escape luxury-tax mess?
- The BCS sure won't fix itself
- Interest in Millsap dwindling?
- Jazz talked Kirilenko for McGrady
- Obama deprives Iran of scapegoat
- NKorea fires 7 missiles defying U.S.
- 'Tea party' protesters unhappy
- Boozer not opting out of contract
180 - Palin resigning as governor
101 - Lack of Obama photos concerning
99 - Don't listen to marriage cynics
93 - Utah leaner in too-fat country
91 - Editorial: A sad day for Utah
86 - Palin's and Romney's roles in 2012?
86 - Jazz plan to re-sign Millsap
81 - Jazz talked Kirilenko for McGrady
73 - Y. gets verbal from cornerback
69
The media has been inordinately good to President Obama so far. That...
Sen. Scott Jenkins was name-checked by Jay Leno Monday night during his...
I'd like to ask a general question to any of you that might know. Have you...
“Cap and trade is free market oriented. When an efficient company sells...
THis is the first sensible comment I have read. My hope is that a trade like...
Anonymous | 9:34 p.m I endured the Nixon recession that carried over into...
We've got plenty of options available to us. I still think some sort of trade...
I filled up my watter several times. Drinking fountain was on at my end.
Actually, the Spurs signed Richard Jefferson, not Al Jefferson.
Those who forget Teddy Roosevelt's words about walking softly and carrying a...
Don't forget that in an article last week Sloan (I think) said that they like...
From one with experience; no it's not easier being a GOOD single parent. But...



You can be the first to comment on this story.