The crackdown on ‘naked short-selling’ intensified on Wednesday as the Securities and Exchange Commission brought its first enforcement cases against the practice – betting that a stock will fall while failing to borrow the underlying shares.

In its filing, the SEC said options traders at Hazan Capital Management and TJM Proprietary Trading of Chicago had improperly claimed to be exempt from rules requiring them to locate the stocks they had been shorting, and then had used complicated options transactions to avoid settling their trades as required.