Continued from page 1

“The irony is that his critique puts Mr. McCain in the same camp as some of the Wall Street CEOs who have led their firms so poorly,” the newspaper said. “They also want someone (else) to blame.”

The SEC, itself, appeared to admit that its blanket ban on short selling could damage the market. Many large hedge funds use short selling as a way to protect their holdings from wild market swings.

Wayne Luthringshausen, chairman of the Chicago-based Options Clearing Corp., warned of the “potentially disastrous effects” of the SEC order for such funds trying to minimize risk in their holdings.

Just hours after Mr. Cox announced the short-selling moratorium for financial firms, SEC staff said the agency was seeking a “modification” to the order exempting some hedge funds from the ban.