I have a pretty strong feeling, that before this hedge fund paid this guy a pile of money, and release his report to the public, that they ran it by the lawyers first. Telling people that a company committing fraud is committing fraud, is not marked in manipulation, it’s telling other people that accompany is committing fraud.
You are in fact allowed to profit from this. The very reason why we have stocks to begin with, is in fact to uncover fraud like this. The whole point of having a market, is that an incentivizes people to go out in learn and discover if companies are profitable and honest. If you discover that a company is lying, and if they are not as healthy as they appear to the rest of the market, then you are in fact allowed to use your special knowledge to go profit from that. In doing so, you tell everyone else that that company has a problem. The information that the company in question is acting fraudulently is important information that the market needs to know, so market stops giving the money.
Finding out information about companies that other people have not got spotted yet is literally the reason why we have stock markets. If this guy spotted a fraud, and then just made a bunch of money on that, good. Corporation should be afraid of their fraud will be spotted, and people at spot it should be rewarded. GE is not a victim.
