SEC Chairman Mary Schapiro recently said of the hundreds ofletters she's received since taking the helm in January, those onshort selling easily top the list.

The commission is currently seeking comment on whether shortsale price restrictions or circuit breaker restrictions should beimposed and whether such measures would help promote marketstability and restore investor confidence. Short selling isgenerally defined as selling securities that an investor does notown or has borrowed and attempting to purchase replacements at alower price. The SEC said short selling is used to profit from anexpected downward price movement or to provide liquidity inresponse to unanticipated demand.

The SEC has long held the view that short selling provides themarket "with important benefits, including market liquidity andpricing efficiency," Schapiro said at an April 9 SEC meeting.However, the practice may also be used to illegally manipulatestock prices.