Power to Truth: A CASI web series with Fahmi Quadir and Anat Admati

Power to Truth: A CASI web series with Fahmi Quadir and Anat Admati

Short Sellers and Their Role in Exposing Fraud

  • Short sellers play a crucial role in price discovery and exposing corporate fraud.
  • Traditional lines of defense against fraud may be ineffective in detecting sophisticated fraud.
  • Short sellers and journalists are incentivized to expose fraud for financial gain and reputational benefits, respectively.

Pik Kadir's Notable Short Positions

  • Pik Kadir is a renowned short seller known for exposing fraudulent companies.
  • Wirecard, a German fintech company, was one of Pik Kadir's notable short positions.
  • Wirecard's fraudulent business model involved global money laundering operations.
  • Pik Kadir's research focused on the prepaid card business and money laundering, leading to the arrest of key executives involved in the fraud.

Concerns about Adtalem Global Education (ATGE)

  • The speaker's hedge fund focuses on identifying potential consumer abuse in various sectors.
  • They have a short position on ATGE due to concerns about the company's practices in the for-profit higher education sector.
  • ATGE is the largest recipient of federal student loan money among university systems.
  • Despite past legal issues and name changes, ATGE continues to receive federal funding and has been buying back its own shares, creating an illusion of financial stability.
  • ATGE's medical school has an extremely low on-time graduation rate, with many students unable to take licensing exams or complete their degrees despite accumulating significant debt.
  • The speaker highlights the predatory nature of ATGE's business model, which exploits students' dreams of becoming doctors without adequately assessing their capabilities.

Predatory Practices of For-Profit Colleges

  • For-profit colleges often market themselves as providing opportunities for minorities who might not otherwise have access to higher education.
  • However, the quality of education at these institutions is often poor, and many students end up with large amounts of debt and no job prospects.
  • Short sellers can play an important role in exposing the predatory practices of these colleges by bringing negative attention to them and causing their stock prices to fall.
  • This can lead to policy changes that protect students from being taken advantage of.

Short Selling as a Risky but Rewarding Endeavor

  • Short selling is a risky business, but the speaker is motivated by a desire for justice and a belief in the power of truth.

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