If it escaped your notice, Thursday and Friday brought news that the BCSC has charged a short seller with fraud for first shorting and then publishing his short position and argument against Silvercorp (SWM) (SWM.to). The amount of lizard brain kneejerk shown by the BCSC in this case leaves your author staggering and wondering just how rotten the core of the Canadian capital market truly is (even worse than I thought would mean a very very muchlot and big amount on top, with cherry, believe me). It’s particularly amazing because even though the main accusations of the short positions way back then, starting with the top call of SWM overstating grade, have been shown by time to be true, the BCSC ignores all evidence and decides to whack the shorter on one or two parts of his call that haven’t turned out to be to the letter.
I mean, can you imagine if Bill Ackman were accused of fraud by the SEC in the US for his now infamous HLF short? After all, he 1) built his position and then 2) announced it by 3) laying out a detailed case that 4) has been shown to have flaws. He may well be guilty of dumbassery, but guilty of criminal fraud and in danger of jailtime? But that’s exactly what the BCSC stance is here towards a market participant who has dared to bet his cash on a company to the downside. Stupid, stupid, stupid people running the show in Canada who cannot see that the promotion of shortside trading would go a long way to help clean up its sordid capital market, they just have to side with the crony capitalism and try to stamp out any semblance of normal before it starts to sprout.
Anyway, enough of my ranting, Iwnattoss has written a strong piece on the BCSC and SVM and the short fraud accusations, you can read it right here.