Sold Short

Manuel Asensio ran a small brokerage and research firm that took short positions in companies it publicly accused of fraud, and this account covers his campaigns and the responses to them. He is unusual among short sellers in having published his research under his own name and having sought publicity for it.

The campaigns he describes include Diana Corporation, Solv-Ex, Turbodyne, Hemispherx Biopharma and PolyMedica, among others. His method was to research a company's claims, take a short position, publish a detailed report asserting fraud or misrepresentation, and press regulators and journalists to act. He describes the responses: litigation against him, complaints to regulators, personal harassment, and pressure on his clearing broker.

Asensio's argument is that public short selling with published research is a legitimate and necessary market function, that the regulatory and legal system is structured to favour the accused company over the accuser, and that market makers and brokers face commercial pressure not to facilitate short positions. He is a partisan writing about his own record, and the record itself is mixed: some of his targets were subsequently shown to have serious problems and others were not, and he faced regulatory sanction himself. Readers should treat it as one practitioner's account of a contested activity rather than as a settled record.