Short-sellers need more transparency, says former SEC commissioner
Ben Ashwell, Corporate Secretary, 26 June 2020
Robert Jackson discusses short-selling, fraud and the role of the commission
Former SEC commissioner Robert Jackson says he is troubled by the ‘increasing evidence of manipulation through short-selling’, and calls on his former colleagues at the SEC to consider a proposal for greater transparency for short-sellers.
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Burford Capital loses fight to force London Stock Exchange to hand over confidential trading data
Global Legal Post, 15 May 2020
Litigation funder Burford Capital has conceded defeat in an unprecedented battle with the London Stock Exchange (LSE) after the High Court rejected its application for the LSE to hand over confidential trading information.
Burford was seeking the identities of market participants trading in its shares in a bid to prove that its share price had been illegally manipulated during a sell-off that occurred after a heavily critical research report by hedge fund Muddy Waters last August.
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Joshua Mitts, Ph.D is an Associate Professor of Law at Columbia Law School. Joshua Mitts, who joined the faculty in 2017, uses advanced data science for his research on corporate and securities law. His primary focus is on information disclosure in capital markets, consumer financial protection, and related topics in law and finance. Mitts employs empirical methods, including statistical analysis and machine learning, for his research on short-selling, informed trading on cybersecurity breaches, information leakage and hedge-fund activism, insider trading on corporate disclosure, and information transmission in financial markets.
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ABSTRACT: Pseudonymous attacks on public companies are followed by stock price declines and sharp
reversals. These patterns are likely driven by manipulative stock options trading by
pseudonymous authors. Among 1,720 pseudonymous attacks on mid- and large-cap rms
from 2010-2017, I identify over $20.1 billion of mispricing. Reputation theory suggests these
reversals persist because pseudonymity allows manipulators to switch identities without ac-
countability. Stylometric analysis shows pseudonymous authors exploit the perception that
they are trustworthy, only to switch identities after losing credibility with the market.
PDF (81 Pages): Paper Mitts Short and Distort