US Department of Justice investigates short sellers

Posted on 12 Dec. 2021 at 16:36Updated 12 Dec. 2021 at 16:51

The activist short sellers, those who earn money by betting on the fall of the shares and who publicly accuse companies of being overvalued because of the mismanagement of their leaders or their excesses (frauds…), are- are they market manipulators? According to Bloomberg, the United States Department of Justice has launched a criminal investigation, with federal prosecutors in Los Angeles, to find out whether these actors are coordinating with each other. By colluding, they would break the law and commit insider trading.

Investigators want to understand how these hedge funds use the equity research that denounces dysfunctions in certain companies (are they circulating it?) And how they then set their bets, especially before the publication of reports that are likely to have an impact on prices.

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