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Stephen Gandel

The Big Board's 'Icky' Attack on Short-Sellers

A reasonable-sounding request truly isn't.
Photographer: Michael Nagle/Bloomberg

Tom Farley, head of the New York Stock Exchange, told Washington lawmakers this week that short-selling feels icky. But what he proposed as a solution should leave anyone who cares about free and fair markets grossed out.

Farley was testifying before a House panel on market structure when he blurted out his feelings about short-sellers -- investors who bet against the shares of individual companies. To be fair, Farley wasn't saying that the actual practice was icky, just that it makes him feel that way. After publicly cleansing himself, Farley said that in fact he was all for short-selling. It's good for the market, he said. (Remember the early warnings on Enron and Lehman Brothers?) Banning it would be bad. All Farley wants, and what he said companies on his exchange have asked for, is for short-sellers to be required to publicly disclose when they are betting against a company.