JPMorgan CEO Jamie Dimon wants US regulators to consider a ban on the short selling of bank stocks
- JPMorgan CEO Jamie Dimon said US regulators should consider a ban on short selling bank stocks.
- The comments come amid a crisis of confidence following a string of bank failures.
- "[If] people are going short and then making a tweet about a bank, they should go after them," Dimon said.
JPMorgan CEO Jamie Dimon believes US regulators should consider a ban on the short-selling of bank stocks.
In an interview with Bloomberg on Thursday, Dimon said the SEC has the ability to investigate potential collusion amid short-sellers that may be incentivized to spread false information, and that they should do that.
The comments from Dimon come amid an ongoing crisis in confidence in regional banks following the collapse of Silicon Valley Bank, First Republic Bank, and Signature Bank.
When asked if regulators should look at the short sellers of bank stocks, Dimon responded, "Yes. Look, my folks would tell me that's not the problem... I think they may partially be wrong."
"Some people are unscrupulous and they use other means to go short. If you look at the detail, the SEC has the enforcement capability to look at what people are doing by name in options, derivatives, short sales, and if someone's doing anything wrong, [if] people are in collusion, or [if] people are going short and then making a tweet about a bank, they should go after them, and vigorously, and they should be punished to the fullest extent the law allows it," Dimon said.
Bank executives are on edge in a world where information, whether true or not, can spread quickly on social media platforms like Twitter and severely impact a company's stock price and underlying business.
On Wednesday, PacWest Bancorp said a report from last week that suggested it was considering a sale to a larger bank led to a 10% decline in its deposit base. The stock fell more than 20% on Thursday.
Last week, a report from the FT said Western Alliance Bancorp was considering a strategic sale to a larger bank. That report led to a swift 60% decline in Western Alliance's stock price. Less than an hour after the FT report was published, Western Alliance denied the report and said in a statement that short sellers were to blame.
"It is shameful and irresponsible that the Financial Times has allowed itself to be used as an instrument of short sellers and as a conduit for spreading false narratives about a financially sound and profitable bank," the statement read.
While short sellers play an important role in making markets more efficient and have in the past identified instances of corporate fraud, some bank executives want a break from the mayhem, at least until the regional banking crisis ends.
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