The DOJ’s Investigation Into Short Selling Is A Good Thing For Investors
The U.S. Department of Justice has launched a criminal investigation into short selling by hedge funds and research funds, Reuters reports. This is a good thing for all investors, especially for those of us who invest in companies that we feel will make a positive impact on our lives and the world. I have some more thoughts on this but first, a quick recap of the Reuters article. (Side note and full disclosure: I’m a Tesla investor. I hold a small number of shares and am holding long term. This means I don’t trade or sell but add to my investments when possible. I also hold a few shares in Brilliant Earth, which is another company I believe in.)
The article noted that investigators are looking into the relationships between hedge funds and firms that publish negative reports on certain companies that often have the aim of lowering the stock price. The Justice Department issued subpoenas to several companies earlier this year, and some of these included requests for funds’ trading records. A second round was issued in recent months. The DOJ is focusing on trades in many stocks, but especially those that were the subject of negative reports.
The article noted that Bloomberg, which first reported the investigation on Friday, noted that authorities are looking at whether or not the funds engaged in insider trading or other abuses. Bloomberg mentioned two firms, Anson Funds and Marcus Aurelius Value, as being among the firms in the hot seat.
Naturally, Tesla Comes To Mind …
It’s normal to assume that Tesla could be one of the stocks mentioned. There have been several negative reports about it over the years, and there were many weeks in which Tesla [NASDAQ:TSLA] was the most shorted stock on the stock market. But it’s important to understand that we don’t know this for sure. In fact, I would advise anyone following this closely not to speculate or assume the best or worst outcome.
However, this investigation is a good omen for anyone who invests in companies they believe in, as it can help prevent online bullying from anonymous trolls for doing so. I remember before I knew anything about short selling, investing, or even began writing for CleanTechnica, I just engaged with Elon Musk on Twitter a little bit and when he replied back to me. After doing so, it drew me into a world I knew nothing about.
When Elon spoke of short selling back then, I thought he was talking about actual shorts you wear. Many in the Tesla community privately messaged me and educated me on investing, what a bull was, a short, a bear, and so on. And while this was going on, I had seemingly anonymous people randomly accusing me of committing crimes, tagging the Department of Justice and Security Exchanges Commissions (SEC) in their tweets, and telling me that I was going to go to jail.
I learned that some of these trolls were a part of a close-knit group of anonymous short sellers who called themselves “TSLAQ.” (If a company goes bankrupt, a Q is placed at the end of their stock symbol, so the point of this group was that Tesla would eventually go bankrupt.) Many of these people have extreme hatred for Elon Musk. I have been accused of working for Tesla, being a secret Tesla employee, a paid shill, and a criminal — all because I interacted with and began supporting Elon Musk and Tesla.
I have been continually bullied by this group over that. I’ve had death threats sent to my website, been told to go end my life, and have had some of these anonymous trolls download my profile pictures or other pictures and make sexually offensive references toward me. I have a Google Drive file filled with screenshots I’ve taken over the years. Some of these anonymous accounts no longer exist, some do.
I am not the only person who has supported Elon Musk to have been harassed on Twitter by this vicious group of short sellers. I’ve seen friends have their private information revealed, have seen them threatened and obsessively harassed. Just recently, a fan I know was hired by Tesla and some of these people are now spreading a rumor that she was a Tesla employee all along who was pretending to be a fan. Unfortunately, some of their supporters or sympathetic ears in the media have joined in with the wild accusations and have even resorted to name calling when being called out for their biases.
So, yes, long story short: I feel as if this DOJ investigation is a good thing and will hopefully start to put an end to at least some of this online harassment and bullying. It won’t immediately, but once the investigation is concluded and the DOJ makes its findings public, presses charges, etc., hopefully, it will usher in an era where short sellers will stop manipulating the markets — in these ways at least.
I have seen these anonymous Tesla short sellers go as far as to file fake NHTSA complaints under the names of Tesla owners. I’ve also seen obsessive online stalking and harassment. Any efforts to stop this kind of behavior is a good step forward.
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