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"The critical firmware flaws came to light last year in an advisory that was sponsored by an investment that was betting against the stock of St. Jude, which was formally acquired by Abbott Laboratories in January. In the two days following the disclosure by investment firm Muddy Waters, St. Jude's stock price fell 12 percent. At the time, St. Jude issued a statement saying the Muddy Waters report was "false and misleading.""

This reminds me of the plot of Casino Royal where the villains short the stock of an airline / airplane manufacturer, then attempt to blow up the plane they are showing off to force the stock to sink. That is some questionable ethics, then again the investment firm is called "Muddy Waters" haha.

[lefstathiou]

Muddy Waters is a famous research shop that specializes in exposing fraud or fishy accounting. They can spend years on a single thesis. They have tanked many companies who went out of their way to mislead investors.

[gozur88]

If the report is really "false and misleading" it's probably illegal. But I'm not sure why Abbott would be doing a recall if that were the case.

[ringaroundthetx]

Hello, this is Margin calling, might want to do that recall anywho sleep well!

[maxerickson]

I wonder if there is a movie where a medical device company sells hundreds of thousands of remotely accessible life critical devices but doesn't really give a shit about security.

[chopin]

No movie needed, I think.

[habosa]

Would love more details, since shorting a stock when you know about a critical product vulnerability sounds like "material nonpublic information" to me which would make this insider trading.

[maxerickson]

Insider trading only applies if the information comes from within the company.

You're free to discover flaws in products and trade ahead of announcing them.

[anitil]

The article was very light on details.

I wonder if this is more along the line of finding an exposed database in the wild, or tracking down OEM suppliers and buying samples.

It's hard to love people doing this, because they could have disclosed this privately, but I think it _is_ fair to impose a high cost on not ensuring security, and this is one way of doing that.

[anitil]

Wow MuddyWater's page looks terrible, but the report can be downloaded here : http://www.muddywatersresearch.com/research/stj/mw-is-short-...

You have to agree to some ... interesting ... terms of use including not to distribute the link above, but I guess that ship has sailed.