The laws are there. But, there is something called free speech. And absent intrusive state surveillance if all of your personal communications, they do not and can early catch even the most blatant fraudsters. I do not believe Adam exchanges info for trading advantage but for journalistic advantage. And THAT is extremely difficult if not impossible to charge as he is entitled to write opinion, and they say it is “opinion”. Then the problem is, he has a following, and it’s a following that knows the bigger shorts are likely driving his columns and they join in the shorting. Everyone literally knows what is going on, but there is little they can do.
I think unfortunately, the only way to deal with that is to regulate shorting of small stocks, stocks that are in small imperfect markets like these tiny biotechs. You should only be able to short against actually held shares, to protect one’s holdings only. Portfolio insurance. You should actually hold shares when you short and the amounts should not be more shares than exist in the marketplace. I believe that would change the dynamic immensely in this space.
And maybe during certain times, there should be no shorting allowed. You’re either in or you’re out, period.
There is a value to shorting. But it has become a tool for market manipulation by big players in small markets and the regulators and members of Congress either do not understand or are in the pockets of these big funds and have reason not to understand. In either case, shorting needs to be regulated. I do not see regulation of “journalistic” free speech or greater surveillance as likely.
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