Two cases...........

CLAMAN: Naked short selling; I had a fund manager ask me yesterday, when is the SEC going to start enforcing the rules to prevent people from abusing naked short selling? I know there are rules in place, but enforcement.

SCHAPIRO: We actually did some cases in the last couple of weeks.

CLAMAN: How many?

SCHAPIRO: Oh god, probably just two cases that I can think of off the top of my head in the last couple of weeks. We are going to enforce those rules, as we’re going to enforce all of our rules in a more aggressive way. Of course, we’ve proposed some regulatory responses.

We made final in the last month on rules with respect to the failure to deliver on short positions. Those rules have been credited with really bringing down failed to deliver by about 56 percent. So those are tremendous positive steps.

We’ve also proposed some market-wide price caps that would slow the decent of the market caused by short selling, or some circuit breakers, as an alternative, where an individual stock declines by more than a certain percentage on a day. A circuit breaker would kick in and no more short selling would be permitted in that stock.

CLAMAN: Why not just reinstate the uptick rule?

SCHAPIRO: We proposed that as an alternative and asked for comment on that. We’ve got thousands of comment letters on all of these multiple proposals that we’ve put out. There’s a concern about whether — in this new market environment, whether the old uptick rule really can work. We want to put into place something that’s going to be effective, not something that just sounds good because it existed in the past.