Short And Distort

DEFINITION of 'Short And Distort'

An illegal practice employed by unethical internet investors who short-sell a stock and then spread unsubstantiated rumors and other kinds of unverified bad news in an attempt to drive down the equity's price and realized a profit.

BREAKING DOWN 'Short And Distort'

Due to recent corporate scandals and investor uncertainty, fraudsters have an easier time spreading doom and gloom by claiming that a firm is losing a very costly class action suit or is suffering from low earnings. In order to prevent being conned, investors should do their own due diligence and be critical of the authenticity of news from unverified sources.