Conflicted analyst

A financial services client hired CRA team members after it discovered a large short position in its stock during the very first month its shares were publicly listed, apparently driven by a highly negative report issued by a little-known analyst at a second-tier investment bank. Research revealed the marginal analyst had a checkered employment history and personal financial difficulties, and that the analyst had met with at least one short-selling hedge fund prior to the first day of trading in the client’s stock. The investigation took an unexpected turn when the client’s CEO became aware that he himself was the subject of an aggressive investigation into his personal life during which he received anonymous letters accusing him of fraud and his friends and associates were contacted by private detectives digging for compromising information. Our investigation identified the person behind the intrusion against the CEO revealing his disreputable past and connections to the short-selling hedge funds which ultimately became the basis of a lengthy article in a national publication.

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