Activist short-sellers often impugn targeted issuers for their own pecuniary gain. They are remarkably proactive and solely responsible for deciding when to publish and what to disseminate to drive down a target company's stock price.
Their intent is clear: to maximize trading profits by publishing negative information to trigger a sell-off in the targeted issuers' common stock.
When these "dark knights of Wall Street," as a recent Law360 Expert Analysis article called them, succeed in driving down a stock price, aggressive securities plaintiff attorneys heed the bat signal and litigate against the affected issuer when they may not have done so otherwise.[1] After all, the defendant company may not have publicly disclosed anything at the time when the activist short-seller decided to launch a faux-fraud campaign to profit from their short position.
But this self-serving relationship between activist short-sellers and entrepreneurial plaintiff officers of the court is conflict-ridden and hinders the fact fi
