Don't Short the Truth

A recent decision of the Alberta Securities Commission appears to give short-sellers wide latitude to negatively comment on targets, and sets a potentially high burden on ASC Staff when seeking interim orders to address potentially damaging commentary.

“Short and Distort”

"Shorting" is selling a position before its price declines intending to buy it back when the price bottoms out. Because the profit realized from shorting a company's stock is directly correlated with a decline in the price of that company's stock, there is incentive for a short-seller to cause a price decline. One method a short-seller may use to cause the price of a company's shares to decline is to push misleading or untrue information into the market to induce people to sell their shares. This practice is colloquially called "short and distort".