In a recent Law360 article, Baker McKenzie Partner Perrie Weiner and Associate Tomas N. Tuszynski examine how recent enforcement actions, such as the Andrew Left conviction, may reshape the legal landscape for short-and-distort schemes, offering new considerations for public companies and investors confronting market manipulation.

Their key takeaways include:

• Regulators and prosecutors are increasingly focused on whether short-selling campaigns involve misleading statements, undisclosed conflicts or trading activity that creates a false impression in the market, rather than on short selling itself.
• Companies targeted by suspicious short attacks should focus on evidence of trading activity, coordination, compensation arrangements and other conduct that may indicate market manipulation, rather than solely disputing a negative investment thesis.
• Public companies may have stronger legal remedies than commonly assumed. With prompt investigation, targeted discovery and carefully developed claims, companies may be able to pursue civil actions against those responsible for fraudulent short-and-distort campaigns.

Read the full article here.