Blog — For-Profit Education
CREW’s new report, Selling America Short, recounts how Wall Street short sellers, hedge funds, and traders have worked to influence government policy in hopes of maximizing their own profits. CREW waded through thousands of government documents, scores of news reports, and reams of market data to uncover these examples of market manipulation by way of the U.S. government. We believe there is still much more to find.
Short sellers like Steve Eisman, Martin Shkreli, and Andrew Left are slick Wall Street pros, schooled in the arts of short selling and molding public opinion. Mr. Eisman brazenly used his testimony at a Senate hearing to bash stocks in the for-profit education industry, causing a chain reaction on Wall Street and producing a healthy profit for his portfolio. Mr. Shkreli, through emails and a citizen petition submitted to FDA officials, tried to get the agency to deny approval of several drugs, hoping the manufacturers’ share price would suffer.
Andrew Left attracted CREW’s attention after he sent the FDA a letter last spring. Mr. Left asked the FDA to investigate Nu Skin, a skin care company he had shorted, for a number of dubious claims it made about its products. It was unclear if Mr. Left actually wanted the FDA to take action or if he just wanted the public to know that he was contacting the agency about Nu Skin. Either way, the end game was the same — get the stock to go down.
You can read the Selling America Short report here. Uncovering the ways short sellers manipulate officials and use government to maximize profits proved extraordinarily difficult. In addition to following short sellers’ scanty paper trail, obtained through requests made under the Freedom of Information Act, CREW relied on tips from insiders and conversations with experts. We know there is more to learn, and we’ll keep working to hold Wall Street accountable.
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