[rwc]

It's simple: GE is down, as of right now, over 11%. Knowing the sensational allegations of the report would have a short-term deleterious effect, they shorted the stock. They can turn the profit from the successful short around into buying GE at its depressed price, and profit a second time when the stock returns to normal levels after the report is found to be exaggerated.

This assumes the report is, in fact, exaggerated.

[elliekelly]

That would be market manipulation[1] and a violation of the Exchange Act[2].

[1] https://en.wikipedia.org/wiki/Market_manipulation

[2] https://www.law.cornell.edu/uscode/text/15/78i