February 27, 2006

Our newest Featured Discussion has begun, on the subject of what (if anything) is an appropriate regulatory response to the phenomenon of plaintiffs', their lawyers', or their confederates' selling short the stock of companies against whom they soon plan to file securities actions. Do the intended plaintiffs or their lawyers possess a sort of inside information about their own intention to file suit, which ought not to serve as a basis for profitable trading? Or is there some other ethical breach going on -- and if so, who if anyone is the proper authority to correct it? Moin Yahya of the University of Alberta leads off, and Larry Ribstein of the University of Illinois will be responding.