Five Years From Wirecard, Europe’s Shorts Are Still Unloved
If you want to short a dodgy company in Europe, good luck keeping it secret.
Legal documents and books at the inquiry into the collapse of Wirecard AG at the German Bundestag’s Paul-Loebe-Haus in 2021.
Photographer: Liesa Johannssen-Koppitz/BloombergShort selling ought to have gotten easier in Europe since Wirecard AG filed for insolvency five years ago this week. The collapse spectacularly vindicated the Financial Times, which nailed the accounting scandal, and the hedge funds that had bet against the stock. But regulation continues to foster a bad environment for short sellers. Europe should beware of letting their craft die.
The supervision of short selling gets more stringent as you move east from the US. One major issue is the disclosure of short positions. The US favors aggregating these for public consumption. The UK is moving toward the same model. But in the European Union, individual positions of 0.5% or more must be revealed.