South Dakota's Bid To Take Over For The SEC And Other Ballot Measures

Perhaps no state has tapped into the current zeitgeist better than South Dakota, which proposes banning a maneuver some federal officials say contributed to the current Wall Street woes. If approved, the measure would allow the state to prosecute or fine a firm if it engages in naked short selling. Short sellers borrow stock and sell it when they think the price will drop, expecting that they can replace it more cheaply. In the "naked" version, the stock is sold without being actually borrowed, which can put downward pressure on the price.

The practice already is federally regulated, but supporters of the measure say the Securities and Exchange Commission doesn't do enough to enforce the ban.

The South Dakota measure qualified for the ballot nearly a year ago and, at the time, supporters were ribbed by a local newspaper that called the measure "baffling and, probably, unnecessary." But now, the measure's supporters are feeling a touch clairvoyant.

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Read the full text of Measure 9, the South Dakota short selling ban (PDF)