Tough talk from Securities and Exchange Commission chairman Christopher Cox last week when he announced an emergency order against "naked" short selling. For the uninitiated and pure at heart, naked short selling occurs when you sell a stock without borrowing it first. The idea is you cover it later on. Covered selling is when you borrow the stock and sell it.

Cox said: "Today's Commission action aims to stop unlawful manipulation through 'naked' short selling that threatens the stability of financial institutions. We will continue our vigorous commitment to investors by working within the SEC and in close cooperation with our regulatory counterparts to promote the continued health and vibrancy of our markets."

That sounds really hard line but it's hard to see it stopping market manipulation. In any case, this sort of stuff is really hard to prosecute because it is such a gray area of law. If you are haven't borrowed the stock at the time of the sale, all you are doing is planning to borrow it before settlement instead. So the SEC's rule just removes the risk that the trader won't be able to find the stock in time. But for those wanting to fiddle the market, they will keep doing it regardless.

Some of the difficulties in this area are examined in this Wharton Business School discussion.

As the experts say here, it's just a minor change in the rules.