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September 18, 2008

DiNapoli Halts Use of CRF Holdings for Short-selling

Move Aimed at Reducing Speculation in Financial Services Industry

In an effort to control mounting pressure on stock prices of financial services companies, New York State Comptroller Thomas P. DiNapoli today announced that he is halting the use of several Common Retirement Fund-owned equities for use by short-sellers.

“The financial services industry has experienced declines in public equity values that in some cases are unconnected to the long-term financial health of the industry,” DiNapoli said. “This speculative selling has put downward pressure on the entire stock market and threatens to drive our national economy deeper into decline. By removing some of the fuel that is feeding this speculative fire, my action is intended to bring stability and rationality back to our equity markets.”

Under DiNapoli’s direction the Fund will remove the shares of 19 bank and brokerage firms, including Goldman Sachs Group Inc. and Morgan Stanley, from those available in its Securities Lending Program. Combined with recent Securities and Exchange Commission rules curbing short selling, DiNapoli believes that his actions will restore fundamentals – earnings power and long-term franchise value – as the key drivers of stock prices.

The firms whose shares DiNapoli removed from the program are those identified by the SEC in its July 15, 2008 emergency order aimed at “naked” short selling.

Under the DiNapoli order more than 105 million shares will be temporarily removed from the pool of available securities under the Fund’s Securities Lending Program.


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