The New York Times Speaks With Former Head of SEC’s Market Abuse Unit Daniel Hawke on Remedies Sought Against Prominent Short Seller

Securities Enforcement Litigation partner Daniel Hawke was recently quoted in The New York Times article, “Criminal Charge Against Outspoken Short Seller Unsettles Wall St.,” which discusses authorities in Los Angeles, including the U.S. Securities and Exchange Commission, and their criminal and civil charges against a prominent activist short seller and his online stock commentary website, Citron Capital.

One of the remedies proposed by the SEC in its civil complaint is to prohibit the defendant from trading within five days of publishing a research report on his website. Asked how the SEC determined to seek a five-day period as a remedy, Hawke, former Chief of the SEC Division of Enforcement’s Market Abuse Unit, stated, “that five-day period is totally arbitrary” and further observed that “[f]ive days in a market that reacts in seconds or minutes to news is onerous and inequitable.”

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