The Securities and Exchange Commission banned naked short-selling in all publicly traded companies, including financial ones.

On Wednesday the agency said it adopted a rule requiring short-sellers and their broker-dealers to deliver securities by the close of business on the settlement date, three days after the transaction. The agency plans to impose penalties for failing to do so.

SEC Chairman Christopher Cox said in a press release that his agency "has zero tolerance for abusive naked short-selling."

The short-selling ban expanded on one that was in effect from July 21 to Aug. 12 and covered 19 financial companies, including Fannie Mae, Freddie Mac, and Lehman Brothers.

The new ban was announced on another bloody day for bank stocks. (See related story.)

CNBC reported Wednesday that John Mack, Morgan Stanley's chief executive, blamed short-selling for a precipitous drop in the investment bank's stock in an internal memo. Morgan Stanley's shares fell roughly 44% at one point during the trading session but recovered some steam to close down 24.2%.

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