[gridlockd]

They didn't prosecute "short selling", they prosecuted market manipulation:

1. Get a large short position

2. Publish damaging information

3. Profit

It doesn't even matter if the information is true. If it is true, it is insider trading. If it isn't true, it is libel. Either warrants prosecution.

[sdinsn]

> If it is true, it is insider trading.

No, it's only insider trading if the information is based on insider (AKA private) information. Anything that can be derived from public information, even with a stretch, is also considered public.

[gridlockd]

I could have made myself clearer, I am talking about "damaging insider information". Publishing already published information isn't exactly news.

In this case, the alleged accounting fraud mentioned in the FT article was insider information.

[oh_sigh]

It depends where the knowledge came from - did it come from an insider, or was the accounting fraud discovered by poring over public records?

[KKKKkkkk1]

You don't understand what the word insider in "insider trading" means.

[gridlockd]

Are you sure you understand it? Insider trading is not limited to employees, that's a common misconception.

I don't know the German law on the matter, but I would wager that the prosecution was warranted, even when the court ends up determining that the charge doesn't hold.

[fluffything]

You definitely do not understand the word, because it is not limited to people, the word "insider" is limited to the information: is the information publicly available? If the answer is "no", then it is "inside" information, and trading on it is "insider trading".

These short sellers were trading on publicly available information. They just gave this information more publicity after getting their short positions, which is what you should do if you discover a market inefficiency that nobody else has discovered yet. That's your reward for making the market more efficient.

BaFin claims that this is insider trading was BS then and is BS now. They just don't understand how markets work, what their job is, and as a consequence did a poor job.

[gridlockd]

> These short sellers were trading on publicly available information.

We're talking about positions that were opened right before the FT article was published. The FT article included allegations by an insider, it wasn't only public information.

Granted, there was also publicly available circumstantial evidence that things were fishy at Wirecard.

Either way, these short sellers weren't convicted, that doesn't mean they shouldn't have been investigated.

[vonmoltke]

The earliest article I can find from the FT that references insider allegations of fraud is https://www.ft.com/content/03a5e318-2479-11e9-8ce6-5db4543da..., which was published almost three years after the report referenced in the Yahoo article. What article was this supposedly timed with?

[marta_morena_25]

Exactly, short-selling and writing a damaging article is kinda similar to Casino Royale... Just well, you don't try to explode a new airplane prototype while fighting off James Bond, you just write a damaging blogpost. The concept is the same though.