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ARTICLE · 28 JANUARY 2019

Special Situations Team Publishes Article On Abusive Short Selling In Globe And Mail

Short-selling – a strategy where an investor bets that a company's shares will decline in price – plays an important role in our capital markets.

CanadaCorporate/Commercial Law

Short-selling – a strategy where an investor bets that a company's shares will decline in price – plays an important role in our capital markets. It can help to ensure markets price in all relevant information, help investors hedge their positions and root out fraud and abuse.

However, Canada has recently seen numerous examples of abusive short-selling, where short-sellers attempt to profit from a short position by manipulating a stock's price downward through false or misleading claims.

An Ontario court decision issued in December makes clear that for Canadian companies and investors subjected to abusive short-selling, currently available private remedies are proving increasingly inadequate.

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