SEC makes landmark short-selling settlement.

Financial News, February, 2003

The Securities and Exchange Commission on Thursday fined an unregistered investment advisory firm $1m ([euro]1.46m) in a landmark settlement aimed at stamping out illegal short-selling of stock.Rhino Advisors, based in New York, was accused of spearheading a series of short sales to support a 'death-spiral financing' scheme meant to drive down the share price of Sedona, a Pennsylvania-based software company. The scheme was said to benefit one of Rhino's foreign clients who held a financial stake in Sedona.

It is understood that proposals for reform are being considered for William Donaldson, the newly appointed SEC chairman. If enacted, they could represent the most far-reaching change since short-selling rules were introduced in the 1930s.