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By Tom Winnifrith | Friday 10 August 2018
Leading short seller Marc Cohodes has been banned by the regulator in Alberta, Canada, from trading in shares in Badger Daylighting Ltd and has also been prohibited from disseminating to the public any statements relating to Badger that he knows or reasonably ought to know are misleading or untrue.
This is because the regulator says that while short he made statements and tweets which were misleading in support of his claims that badger was engaged in illegal toxic dumping.
A formal hearing will take place on August 15.
It goes without saying that Cohodes, a controversial and divisive figure in the bear community, is innocent until proven guilty.
If he is guilty of misleading investors while short that is clearly a crime and it will be used by those – like Andrew Monk of VSA and Roger Lawson of ShareSoc as evidence that bears are bad news. Monk has recently suggested that the way for Nex to dominate the UK small cap market is to make it a market where shorting is illegal and impossible.
The reality is that just as the odd bear misleads investors and so commits market abuse so too do m any bulls. Just read any Bulletin Board thread on a hot stock for half a minute and you will see such behaviour en masse.
How often do we see clear evidence that companies, promoters – thinking of no fat Aussies in particular – and brokers publish misleading statements? Yet no-one ever suggests that this implies that the whole bull community is bent and that the markets would be better off if going long were banned!
This should be simple. There are bad eggs in both the bull and b ear community. Anyone committing market abuse should have the book thrown at them whether bull or bear. But any market banning those who are incentivised to expose fraud (i.e. bears) when regulators appear unwilling to act is merely an invitation to flock to that market en masse. And in whose interest would that be?
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