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Jail term call on short sellers
Evening Standard 8 Jul 2008
JPMorgan Chase chief executive Jamie Dimon has called for jail sentences for short sellers of stock who make up rumours to drive share prices down.
Dimon urged regulators to probe the crash of Wall Street bank Bear Stearns to see whether it was deliberately brought to its knees by the practice.
JPMorgan completed its fire-sale acquisition of Bear Stearns in May.
Trading volumes in Bear shares spiked in the days before the buyout and media reports suggested rumours spread by short sellers betting on a fall in Bear Stearns' share price helped to finish off the bank.
"Where there's smoke, there's fire," Dimon told PBS television. "I think the Securities and Exchange Commission should investigate it.
"I think if someone knowingly starts a rumour or passes on a rumour, they should go to jail.
"This is even worse than insider trading. This is deliberate and malicious destruction of value and people's lives," he added.
