Paul Davis has a practice focused on mergers and acquisitions, proxy fights, corporate governance, corporate finance and business restructuring, and a broad range of securities and business law matters for both private and public issuers. Paul is the Co-Chair of the firm’s Capital Markets & M&A practice group and leads and coordinates the practice’s efforts across Canada.
Based on our research, it is clear that IIROC’s largely non-interventionist approach and its focus on maintaining liquidity have made Canadian companies attractive targets for short campaigns. From 2015 to 2018 there was an increase in the number of short campaigns in Canada, while generally in other jurisdictions there was a decrease. Additionally, the number of short campaigns in Canada is utterly disproportionate to the size of our capital markets when compared to the United States, the European Union and Australia (as examples). The reason for this seems clear: short selling regulations in Canada are out of step with regulations in those other jurisdictions – see Schedule A attached hereto. As a result of inherent weaknesses in the Canadian short sale regulatory regime, short sellers may well be attracted to the Canadian capital markets.
PDF (164 Pages): Paper Analysis of the Short Selling Landscape of Canada
New York Post, 16 April 2006
One Midwestern financial company, long a target of short-sellers, has deployed an infrequently used tactic to inflict pain on its naysayers: Its management has put in place a strategy that consistently makes money.
The stock of Novastar Financial, a Kansas City, Mo.-based home-equity real estate investment trust, has been a battleground between long-term holders in love with its juicy dividends and short-sellers who suspect that the company has massive default risk with those loans.