Just because the SEC has realised that Chris Cox’s crazy short sale ban was a bad idea, don’t get too confident that the world wide epidemic of market manipulation by regulators has been stemmed. Just today we learned that Italy’s stock market regulator has extended a ban on short-selling to all stocks listed on the Milan stock exchange.
The Italian market regulator, Consob, had already banned short selling on bank and insurance stocks earlier this month. We can’t decide whether broadening the ban is worse than having regulators play favourites with their protected stocks. What do you think?