In a letter to the editor published Sunday, American Bankers Association President and CEO Rob Nichols expressed disappointment with a recent Wall Street Journal editorial questioning the association’s motivations for asking regulators to investigate possible manipulative short selling of bank stocks. Nichols emphasized that ABA views short selling as a legitimate tool and that its concerns focus on efforts to manipulate bank stock prices to illegally benefit short sellers. “It is the SEC’s job to identify those bad actors, and along with the Justice Department, hold them to account,” he said.
“You may not see any evidence of manipulation, but the Justice Department apparently has seen enough to launch an investigation, according to Reuters,” Nichols wrote to the Journal’s editors. “We hope that, instead of writing that the American Bankers Association is trying to ‘prop up share prices of challenged banks,’ you will join us in supporting public companies trying to operate in a truly free market. Honest investors benefit from legitimate price discovery, but false information and manipulation hurt all market participants.”