On 16 February it was reported by the WSJ that the U.S. Justice Department is investigating whether short sellers have been sharing negative research reports in order to drive down stock prices.

Background

• DOJ investigation led in part by the US Attorney's Office in Los Angeles
• Seized hardware, communications, and trading records of some firms
• Firms say the DOJ is relying on academic research by Columbia Law School professor Joshua Mitts; Mitts is advising the government investigators
• DOJ is looking at "spoofing" and "scalping" tactics; both illegal