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EU court lawyer cautions against short-sales rule

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September 12, 2013 06:16 AM EST | AP


BRUSSELS — A top lawyer at the European Court of Justice says continent-wide rules on short-selling are overreaching and should be thrown out.

In an opinion Thursday, the court's independent Advocate General, Niilo Jaaskinen, said the rules threatened to replace national decision-making on short-selling, where investors profit by betting that a stock or bond will lose value.

During the eurozone debt crisis, many blamed such speculation for instability in the financial markets and several countries imposed temporary restrictions on short-selling – most of which were not renewed after markets stabilized.

Britain brought the case against the EU-wide regulations, which went into effect in November 2012, and Thursday's opinion – though not binding – holds sway when judges issue a decision.