Muddying the waters: when does short selling become market manipulation?

This paper aims to consider “spoofing”, “layering” and “short reports” in the context of market manipulation and, in particular, a recent controversy involving a short-selling attack on a major UK listed company that was considered by the High Court.

The very demanding legal and evidential prerequisites and practical difficulties, involved in bringing both criminal and regulatory actions in such cases are identified and discussed, as is the role of the Financial Conduct Authority.

These challenges help explain why so few actions of this type are brought.

This is the first paper to consider the implications of Burford Capital Limited v London Stock Exchange Plc [2020] EWHC 1183 (Comm).