4 ms·
>So there exists a class of professional services designed to temporarily crash stock prices to make short sellers money? Curious. There exists a class of prof
by foldingmoney 7y ago
>So there exists a class of professional services designed to temporarily crash stock prices to make short sellers money? Curious.
There exists a class of professional services designed to uncover financial fraud. That's what this is (allegedly) an example of.
Investors can make money by correctly betting that a stock price will go down, hence they might be interested in funding research that uncovers financial fraud. The key point is that the stock price goes down _because of the fraud_ that was exposed -- not because someone _accused_ GE of fraud.
If someone put out a false report accusing a company of fraud with the hope of causing a temporary price drop, that would be illegal. They would be fined / go to jail and would be barred from working in the financial industry again.
For the record, I think Markopolis's analysis is wrong. Whether it was done in good or bad faith is another matter.