June 2, 2009 / 5:56 PM / in 9 years

Nasdaq CEO: short ban did not affect stock price

A man looks into the window at the NASDAQ Market Site in New York, September 29, 2008. REUTERS/Mike Segar

WASHINGTON (Reuters) - Data suggests that the U.S. ban on short selling of financial stocks in 2008 did not impact stock prices, the chief executive of exchange operator Nasdaq OMX Group Inc (NDAQ.O) told business leaders on Tuesday.

Chief Executive Robert Greifeld told the U.S. Chamber of Commerce in Washington that a type of short selling, called naked short selling, was the real problem.

Short sellers arrange to borrow shares they consider overvalued in hopes of repaying the loan for less and profiting from the difference. A naked short sale occurs when an investor sells stock that has not yet been borrowed, which can distort markets.

Reporting by Kim Dixon, editing by Matthew Lewis

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