New Calls for Short-Selling Ban Has Experts Defending the Tactic
- Practice brings attention to overvalued companies in sector
- Shares of healthy companies don’t go to zero: Steve Sosnick
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For all the latest calls to prohibit short selling amid the banking turmoil, there’s an argument to be made that such a ban would actually hurt investors.
Short sellers may have reaped billions of dollars this year by betting against banks, but some market pundits say they’re also helping to shed light on overvalued companies in the sector. And a ban on the tactic, similar to one imposed by the Securities and Exchange Commission during the Global Financial Crisis, seems unnecessary as other regulatory measures could be explored.