GM, Ford shares join short-sell ban

General Motors Corp. and Ford Motor Co. have joined a list of stocks that the government bars from short-selling, or betting by investors that a stock’s price will fall.

The move appeared to have little effect on GM shares, which fell nearly 11.5% Monday after the company drew $3.5 billion from a line of credit. GM and Ford are among the shares most often sold short on the New York Stock Exchange.

Short-sellers borrow shares and sell them, anticipating that they will buy new shares in the future for a lower price.

The U.S. Securities and Exchange Commission barred short-selling in nearly 800 companies last week in an attempt to moderate share price declines that regulators argued were worsening the financial crisis.

Critics have accused the SEC of trying to set an unnatural floor on the share prices of financial firms, noting there were no rules governing how quickly or how high stocks could rise.

The list was open to banks, insurance companies and other firms with large stakes in financial companies. Last weekend, the SEC allowed other companies to join, and Monday’s additions included 30 other stocks on the NYSE, including GM.

Ford said it applied for the list Monday and would have its ban go into effect today.

The two automakers had relied on their credit arms for much of their profits in recent years, before the housing collapse and credit crunch turned their fortunes around.

Ford owns Ford Credit outright, and GM qualified through its 49% stake in GMAC and its troubled mortgage unit ResCap.

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