Just a few short weeks ago, the SEC launched an administrative action against an on-line futures and options brokerage and clearing agency, as well as its senior executive for engaging in a naked short selling scheme. 

The allegations, effectively, declared that the firm had failed to deliver certain securities as part of this scheme.  The SEC claimed that the firm had failed to deliver the securities as required within the three-day period. 

However, lawyers for the firm have argued that the SEC is engaging in a new rule making endeavor with this enforcement action.  The defendants’ lawyers have argued that the transactions all were consistent in that all transactions were timely covered.

In short, the SEC seems to be pursuing this matter with a great deal of vigor.  It will be interesting to see if the Court accepts the SEC’s interpretation on naked short selling.