Short-Selling Hedge Funds Deserve a Level Playing Field
Regulators should use carefully the discretion they have in how they police public companies and the hedge funds that bet against them.
Short-selling hedge funds are getting an easier ride in the UK than in Europe.
Photographer: Carl Court/Getty Images EuropeLife has never been easy for short sellers in Europe. Post Brexit, the contrast with the UK is becoming more pronounced. And it’s the more lenient British approach that should prevail.
European companies have proved a difficult hunting ground. For starters, a hedge fund launching a public attack on a firm risks becoming a target itself for regulatory scrutiny. Wirecard AG is the textbook example, given that Germany authorities initially sided with the fraudulent firm against its critics before it imploded in 2020. But it’s not the only one. The French watchdog went after Muddy Waters LLC over its research on grocer Casino Guichard Perrachon SA, eventually letting the short seller off after a long fight.