"A 'short-and-distort' is the opposite. Short sellers bet that a stock will fall, then deliberately spread false negative information to make that happen. It's illegal. And it's exactly what the SEC and DOJ found was happening."
"In June 2024, the SEC charged Anson Funds Management - a $2.9 billion hedge fund - with running a secret scheme from 2018 to 2023. Here's how it worked, in plain terms: Anson would quietly 'short' a company's stock... They then paid Andrew Left of Citron Research to publish false, alarming reports... Left would blast these reports out to hundreds of thousands of followers... Investors panicked, sold their shares, the stock crashed, and Anson collected its profits."
"To hide the payments to Left, Anson funneled the money through a third party called Falcon Research, using fake invoices for 'research services' that were never actually performed."
"One of the targets was PolarityTE - a biotech company that had developed SkinTE, a revolutionary product that used a patient's own skin to heal wounds. Barry Honig and his family entities were the second-largest shareholders, owning nearly 10% of the company. In June 2018, Citron Research published a report with a headline screaming 'FRAUD' in all capitals."
A short-and-distort scheme involves short sellers betting a stock will fall and then deliberately spreading false negative information to make that happen. The SEC and DOJ found such conduct in a coordinated effort tied to Anson Funds Management from 2018 to 2023. Anson quietly shorted targeted companies, then paid Andrew Left of Citron Research to publish false, alarming reports. Those reports were distributed widely through social media and media outlets, using claims that companies were frauds, scams, or dead. Investors sold, stock prices dropped, and Anson profited. Payments were concealed through a third party using fake invoices for research services that were never performed. PolarityTE was among the targets.
Read at Business Matters
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