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Delivery failure close-out
Title
Delivery failure close-out: an event study on the effects of newly adopted regulation SHO amendments.
Creator
Scherle, Richard., Harriet L. Wilkes Honors College
Abstract/Description
A generally illegal form of short selling in United States equity markets, called "naked shorting," occurs when a seller of stock sells shares that do not exist. This type of short selling has negative consequences that result from the tactic's ability to be used as a tool to artificially inflate an issuer's stock supply, which introduces significant harm to the integrity of the market's natural forces of supply and demand. Newly adopted amendments to the Securities and Exchange Commission's...
Show moreA generally illegal form of short selling in United States equity markets, called "naked shorting," occurs when a seller of stock sells shares that do not exist. This type of short selling has negative consequences that result from the tactic's ability to be used as a tool to artificially inflate an issuer's stock supply, which introduces significant harm to the integrity of the market's natural forces of supply and demand. Newly adopted amendments to the Securities and Exchange Commission's short sale governance regulation, called Regulation SHO, required the mandatory purchasing of shares by certain market participants in order for those participants to close-out previously excused delivery failures, called "grandfathered" failures. This study examines the consequences of this new regulation, in terms of share price and volume, for those few securities that had the most persistent delivery failure problems. Because the regulation mandates the purchase of shares by certain influential market participants, I examine if the stock markets of these securities exhibited unusual volatility which may be indicative of the market maker trying to cover at low cost. Using technical analysis techniques, such as volume surge detection (using moving volume averages), the performance of the target securities will be compared with appropriate benchmark indices for the purpose of detecting unusual activity. Unusual activity may be consistent with my hypothesis that market makers may encourage additional volatility to cause liquidity problems for marginal investors which forces them to sell part or all of their position. As discussed in great detail, the extra marginal shares injected into the market by the action of forced selling by these marginal investors may be used by the market makers to lower their cost of regulation compliance.
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Date Issued
2008
PURL
http://purl.flvc.org/FAU/210002
Subject Headings
Securities industry, Investment analysis, Short selling, Capitalism, Moral and ethical aspects
Format
Document (PDF)
The Effects of Social Structure on Individual Actions: a Social Cognition and Social Structure Approach
Title
The Effects of Social Structure on Individual Actions: a Social Cognition and Social Structure Approach.
Creator
Knoche, Harry "Trip", Castrogiovanni, Gary J., Florida Atlantic University
Abstract/Description
This study examines the effects of epistemic motives and individual social structure (strength of social ties) on individual actions. lt has been suggested that the informal structure of relations that develops within firms affects the actions of individuals e effects of both epistemic motives and social structure are considered. The findings of this study suggest that information about the epistemic motives of employees can provide insight into the fonnation of the individual social...
Show moreThis study examines the effects of epistemic motives and individual social structure (strength of social ties) on individual actions. lt has been suggested that the informal structure of relations that develops within firms affects the actions of individuals e effects of both epistemic motives and social structure are considered. The findings of this study suggest that information about the epistemic motives of employees can provide insight into the fonnation of the individual social structures and the intrinsic desire of employees to take interdependent or independent actions. The effects of epistemic motives and individual social structure on individual actions, the organizing process and the formulation and implementation of strategies are discussed.
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Date Issued
2010
PURL
http://purl.flvc.org/fau/fd/FA00000309
Subject Headings
Motivation (Psychology)--Social aspects, Social networks--Psychological aspects, Social capital (Sociology), Managerial economics, Economics--Moral and ethical aspects
Format
Document (PDF)