The Slippery Slope of the Government’s Allegations Against Andrew Left

In a thrilling return of our Short Story format, Carson Block of Muddy Waters Capital sits down with Edwin Dorsey, Author of The Bear Cave. In this episode, Carson and Edwin break down the charges and allegations underlying the Government’s complaint against activist short seller Andrew Left. Edwin begins by questioning the Government theories of Andrew’s trades in the stock of General Electric (GE). He then goes on to give an example of another prominent hedge fund manager, Dan Loeb of Third Point LLC, and his activities surrounding Herbalife (HLF) in 2013. As Carson shares, there are a myriad of factors that go into a sophisticated investor’s trading activities, only one of which is the investor’s own price objective. Carson then explains why this case is paramount for the future of the sell-side industry, their use of price targets, and all the garbage that goes into Wall Street’s infamous valuation models. Can the SEC really conjure up a new rule that could require Andrew, and possibly other short sellers, to hold positions for five days after publishing a report? Carson analyzes this possibility under the First Amendment explaining why he doesn’t believe any court would grant such an unconstitutional proposal. Will this episode have long-lasting impacts for the behavior of short activists? And what might it mean for the spirit versus the letter of the law as it pertains to investors, corporations, and regulators? -- Click the bell to subscribe to Zer0esTV and sign up for the Zer0es TV newsletter: Follow us to stay up to date on the latest from Zer0esTV Twitter: Follow the host: Carson Block - ZFG is a seriously not-so-serious bi-weekly show breaking down the top headlines in short selling, finance, and world events. Zer0es TV is the world’s largest video platform for short-sellers. Hear the latest news, share ideas, watch deep-dive interviews, and learn from industry legends.