Bear Raiding

A trader or group sells short, meaning they sell shares they have borrowed, in large volumes, sometimes alongside false stories about the company’s health. As the price slides, other holders panic and sell, which speeds the fall. The raider then buys back at the lower price and keeps the difference, or builds a stake cheaply. The tactic works best on thinly traded or financially stretched companies. Short selling itself is lawful and normal. The abuse lies in the aim of driving the price down artificially and in any false information. Regulators treat it as market manipulation, and many countries also require disclosure of large short positions. Surveillance teams look for bursts of selling that coincide with rumour activity on social media. Healthy companies can lose value and funding to a campaign that has nothing to do with their results.

Shortly before a small lender reports results, a group of traders builds large short positions in its shares and posts claims on forums that depositors are withdrawing funds. No evidence supports the claims. The price falls 25% in two days as other holders sell, and the group buys back at the low. The exchange’s surveillance team links the posts to the trading accounts and refers the case to the regulator.