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Germany’s regulator bans short-selling in Wirecard

THOSE WHO profit from the misery of others are not often popular. Short-sellers, who try to make money by selling borrowed shares and buying them back later at a lower price, have long been viewed with suspicion. They are blamed for exacerbating price falls so that they can reap bigger returns. In times of market stress authorities often ban them. In 1610 regulators in Amsterdam forbade short-selling, blaming it for a fall in the value of the Dutch East India Company. Two centuries later Napoleon prohibited it as an act of treason.On February 18th BaFin, Germany’s financial regulator, banned investors from taking new net short positions in Wirecard, a German digital-payments firm, after its share price fell by over 40% in under three weeks. The crash marked a swift change in its fortunes. In 2018 Wirecard displaced Commerzbank, a 149-year-old lender, in the DAX 30, an index of Germany’s biggest firms.
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