The Secret To Beating 'Short And Distort' Schemers

Law360, New York (August 26, 2011, 2:00 PM EDT) -- The ongoing bear market has given rise to “short and distort” traders who manipulate stock prices by taking short positions and then using a smear campaign to drive down the price of the targeted stock. Recent market volatility and investor uncertainty have made it easier for such short schemers to stimulate fear about particular stocks and cause the stock price to fall.

Issuers victimized by a “short and distort” scheme — even those who credibly deny the distorters’ smear campaign — may also find themselves defending...
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