Canada needs to toughen short selling rules to weed out abuse, market watchers say – CBC

Soliman said he would like to see a crackdown on a type of abusive short selling that almost always originates on social media and stock message boards, by people putting out research designed to start a panic.

“Those who do that know full well that … investors jump away from these positions at the slightest notion that there could be something wrong,” he said. “The exaggerations end up resulting in a self-fulfilling prophecy.”

“In circumstances where it’s founded, go get them,” he said. “But don’t exaggerate and don’t misrepresent.” CBC

There are plenty of good reasons to short particular stocks however we often see very negative “hit” pieces which either misrepresent or simply ignore facts about companies. And the people who publish these sorts of pieces, while they are usually cagey about their own identities, are happy to announce that they are exclusively on the short side of the market.

Reasonable disclosure standards would improve the markets overall.

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