SEC Rule 201 restricts short selling activity if a stock declines at least 10% from the previous trading day’s close. Historical experience indicates that while the restriction is likely to apply to a relatively small percentage of all stocks on an average day, the restriction is likely to prove relevant in a large number of securities class actions.
Market expectations and security prices
Market participants use the information available to them at any given time to form expectations of the future performance of a company and a company’s stock...