SEC Attacks Short Sellers, Subpoenas Rumormongers

The SEC, tired of being left out of the regulatory party, has launched a few initiatives this week to punish those who are responsible for the current credit crisis: short sellers and rumormongers.  Did you think it was irresponsible lending coupled with a lack of the most basic regulatory oversight of an industry gone mad with greed?  Nah, it was the short sellers.  They must be stopped!  Forgetting that Regulation SHO already exists, which stipulates that short sellers must confirm with their clearing firms that they can borrow shares before they short a stock, the SEC is still claiming that "illegal naked shorting" exists and is now forcing investors to actually borrow the shares before shorting a stock.  My question to the SEC:  If you think Regulation SHO is being violated, why not go after the firms who are in violation?  

The SEC has also subpoenaed several securities firms and more than 50 hedge fund advisors  seeking communications data related to short-selling and options trading in Bear Stearns and Lehman Brothers stock.  Good luck to them in determining who was shorting these stocks based on a genuine understanding of the enormous risks inherent in their businesses, or an attempt to manipulate their stocks by spreading bogus rumors.  The important thing is that the SEC looks like it is actually doing something.  In times of financial turmoil it is important to look very busy, or risk having your budget cut at the next congressional get-together.  Whether you are actually accomplishing anything useful is apparently not important.