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Comment by tomelders | Hacker News Reader

> He was originally hired by two other neuroscientists who also sell biopharma stocks short

I'm blown away by this investment strategy. What a brilliant way to monetise exposing fraud. Get your proof, short the stock, publish your proof, profit!

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In finance there are a number of hedge funds who do this, like Citron Research which specializes in exposing fraud and short selling it for profit.

This incentivisation is one of the classical arguments for allowing short sellers in the market

This is an improvement over the status quo, which is that fraud exists, hurts patients, and continues to exist.

Unfortunately it's more common than you think... I remember this case in particular from some years ago:

https://www.legalreader.com/st-jude-medical-files-lawsuit-ag...

> Unfortunately it's more common

Why is calling out fraud unfortunate?

With respect to St. Jude, Muddy Waters was at least partially right [1].

[1] https://www.hipaajournal.com/fda-confirms-muddy-waters-claim...

Presumably GP is not saying that the calling out of fraud is unfortunate, but that the fraud itself is unfortunate.

Precisely, sorry if it was not clear enough. Pointing vulnerabilities and betting on the side to effectively become a stakeholder raises some concerns on your true intentions, even if it could be legal to do so.

There are several companies that do this! Hindenburg Research and Muddy Waters Research are two.

Doing well by doing good

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