> That is pretty much what Hindenburg does; they find frauds and short them. While such firms certainly have an incentive to make the company they've shorted l

> That is pretty much what Hindenburg does; they find frauds and short them. While such firms certainly have an incentive to make the company they've shorted look bad, it turns out that it works best (and is easier) when the company they short actually is bad. Thus, they've found a way to make a business out of identifying frothy financial bubbles built on shaky-to-fraudulent fundamentals and popping them. It's kind of a public service in the sense that it corrects the market when it goes awry and ultimately they are betting their own money that their investigation is correct.