4 ms·

They didn't prosecute "short selling", they prosecuted market manipulation: 1. Get a large short position 2. Publish damaging information 3. Profit It doesn

They didn't prosecute "short selling", they prosecuted market manipulation: 1. Get a large short position 2. Publish damaging information 3. Profit It doesn't even matter if the information is true. If it is true, it is insider trading. If it isn't true, it is libel. Either warrants prosecution.

marta_morena_25 6y ago
Exactly, short-selling and writing a damaging article is kinda similar to Casino Royale... Just well, you don't try to explode a new airplane prototype while fighting off James Bond, you just write a damaging blogpost. The concept is the same though.
sdinsn 6y ago
> If it is true, it is insider trading. No, it's only insider trading if the information is based on insider (AKA private) information. Anything that can be derived from public information, even with a stretch, is also considered public.
- gridlockd 6y ago
  I could have made myself clearer, I am talking about "damaging insider information". Publishing already published information isn't exactly news. In this case, the alleged accounting fraud mentioned in the FT article was insider information.
  - oh_sigh 6y ago
    It depends where the knowledge came from - did it come from an insider, or was the accounting fraud discovered by poring over public records?
KKKKkkkk1 6y ago
You don't understand what the word insider in "insider trading" means.
- gridlockd 6y ago
  Are you sure you understand it? Insider trading is not limited to employees, that's a common misconception. I don't know the German law on the matter, but I would wager that the prosecution was warranted, even when the court ends up determining that the charge doesn't hold.
  - fluffything 6y ago
    You definitely do not understand the word, because it is not limited to people, the word "insider" is limited to the information: is the information publicly available? If the answer is "no", then it is "inside" information, and trading on it is "insider trading". These short sellers were trading on publicly available information. They just gave this information more publicity after getting their short positions, which is what you should do if you discover a market inefficiency that nobody else has discovered yet. That's your reward for making the market more efficient. BaFin claims that this is insider trading was BS then and is BS now. They just don't understand how markets work, what their job is, and as a consequence did a poor job.
    - gridlockd 6y ago
      > These short sellers were trading on publicly available information. We're talking about positions that were opened right before the FT article was published. The FT article included allegations by an insider, it wasn't only public information. Granted, there was also publicly available circumstantial evidence that things were fishy at Wirecard. Either way, these short sellers weren't convicted, that doesn't mean they shouldn't have been investigated.
      - vonmoltke 6y ago
        The earliest article I can find from the FT that references insider allegations of fraud is https://www.ft.com/content/03a5e318-2479-11e9-8ce6-5db4543da632 https://www.ft.com/content/03a5e318-2479-11e9-8ce6-5db4543da..., which was published almost three years after the report referenced in the Yahoo article. What article was this supposedly timed with?

marta_morena_25 6y ago

Exactly, short-selling and writing a damaging article is kinda similar to Casino Royale... Just well, you don't try to explode a new airplane prototype while fighting off James Bond, you just write a damaging blogpost. The concept is the same though.

sdinsn 6y ago

> If it is true, it is insider trading. No, it's only insider trading if the information is based on insider (AKA private) information. Anything that can be derived from public information, even with a stretch, is also considered public.

gridlockd 6y ago
I could have made myself clearer, I am talking about "damaging insider information". Publishing already published information isn't exactly news. In this case, the alleged accounting fraud mentioned in the FT article was insider information.
- oh_sigh 6y ago
  It depends where the knowledge came from - did it come from an insider, or was the accounting fraud discovered by poring over public records?

KKKKkkkk1 6y ago

You don't understand what the word insider in "insider trading" means.

gridlockd 6y ago
Are you sure you understand it? Insider trading is not limited to employees, that's a common misconception. I don't know the German law on the matter, but I would wager that the prosecution was warranted, even when the court ends up determining that the charge doesn't hold.
- fluffything 6y ago
  You definitely do not understand the word, because it is not limited to people, the word "insider" is limited to the information: is the information publicly available? If the answer is "no", then it is "inside" information, and trading on it is "insider trading". These short sellers were trading on publicly available information. They just gave this information more publicity after getting their short positions, which is what you should do if you discover a market inefficiency that nobody else has discovered yet. That's your reward for making the market more efficient. BaFin claims that this is insider trading was BS then and is BS now. They just don't understand how markets work, what their job is, and as a consequence did a poor job.
  - gridlockd 6y ago
    > These short sellers were trading on publicly available information. We're talking about positions that were opened right before the FT article was published. The FT article included allegations by an insider, it wasn't only public information. Granted, there was also publicly available circumstantial evidence that things were fishy at Wirecard. Either way, these short sellers weren't convicted, that doesn't mean they shouldn't have been investigated.
    - vonmoltke 6y ago
      The earliest article I can find from the FT that references insider allegations of fraud is https://www.ft.com/content/03a5e318-2479-11e9-8ce6-5db4543da632 https://www.ft.com/content/03a5e318-2479-11e9-8ce6-5db4543da..., which was published almost three years after the report referenced in the Yahoo article. What article was this supposedly timed with?