But in a rare win for a targeted company, an activist short seller has posted a public apology online this week to a company that they targeted. Real estate investment trust Farmland Partners Inc. won the day against short seller Quinton Mathews, who had posted criticism of the company under the pseudonym Rota Fortunae.
As a result of a lawsuit against him, he has settled by paying the company restitution and “a multiple” of the profits on his short bet in 2018, according to Reuters. His research helped wipe “as much as $115 million” off the value of Farmland Partners.
As part of the settlement, Mathews conceded that “many of the key statements” in his report were wrong. “I regret any harm the article and its inaccuracies caused,” he said in an announcement on both Twitter and Seeking Alpha.
— Rota Fortunae (@RFortunae) June 21, 2021
“Investors already recognize that the company was the victim of a short and distort scheme,” said Paul Pittman, Farmland’s chief executive officer.
Jacob Frenkel, an attorney with Dickinson Wright not involved in the case, said Farmland’s win could embolden other companies that are targets of short sellers. “It’s highly unusual and refreshing to see a company take on this fight, because most will take the short term blow of the attack without pursuing legal vindication,” he said.
Abby Estikangi-Carmel of Seeking Alpha noted that authors certify that they were “not paid to post” and, for short reports, “that the assertion was run by the target company.”
“Regardless of the steps you take, a bad actor may decide to defraud us by violating our policies, as evidently happened here. Thankfully, it appears to be an isolated incident,” Estikangi-Carmel concluded.
The settlement concludes: “Given the many inaccuracies in the article, I will refrain from commenting on FPI, its employees and its performance going forward.”
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