Which U.S. market regulator temporarily banned short selling of nearly 800 financial stocks in 2008?

The Securities and Exchange Commission temporarily banned short selling of nearly 800 financial stocks in 2008.

The SEC introduced the emergency restriction during the global financial crisis as policymakers tried to slow extreme declines in financial-company shares. The temporary rule covered many publicly traded financial stocks and took effect in September 2008, shortly after Lehman Brothers failed.

Short selling involves borrowing shares and selling them with the intention of buying them back later at a lower price. Critics argued that concentrated short selling and rumors could worsen market stress, while opponents of the ban said it reduced liquidity and interfered with price discovery.

The SEC’s emergency order was not a permanent end to short selling. The measure expired in October 2008. The episode is often confused with the separate “uptick rule,” a trading restriction that limits when short sales may be initiated after a stock has declined.