[klmadfejno]

It could open a company to a hostile takeover, or cripple them if they were reliant on a realistic share price to raise necessary capital.

Shorting a company itself isn't so bad. Orchestrating bad PR to boost your short option earnings is bad.

[nrmitchi]

> Orchestrating bad PR to boost your short option earnings is bad.

So legit question, lets flip this around. Lets pretend that I am super confident, and have strong evidence to believe, that company $ABC, currently trading at $100/share, has been committing fraud and is drastically over-valued because of it. Lets say, I don't know, it was intentionally skipping numbers during the day to give the appearance of higher volume[0]. I've determined this by investing a bunch of resources in research to determine that reported numbers don't line up with the actual number of customers, or don't line up with other available data from other sources.

So I take a short position. But I'm not allowed to say anything about it. I keep silent.

Now 3 years later, the fraud is uncovered elsewhere, I make a killing, and my only response is "Ya, I knew they were fraudulent years ago, and here is all of my proof. But I didn't say anything for 3 years."

Would you argue that I'm not complicit in that fraud for all the years I knew about it?

[0] https://www.bloomberg.com/news/features/2020-07-29/luckin-co...

[klmadfejno]

No? You're not complicit with fraud if you suspect someone of fraud but don't go public with your suspicions. I don't think that's up for debate at all tbh.

[CydeWeys]

Huh? You think there's a duty to publicly call out mere suspicions of fraud? I would argue there's the opposite -- people are hesitant to go public with any accusations because of the very real threat of being sued for defamation/libel.

There are very few true obligations to report in the US. All I'm aware of are tied to specific occupations/licenses.