Few events can disrupt a public company’s trajectory as suddenly as the publication of a short-seller report. Often sensational in tone and light on substance, these reports typically allege that a company has misstated its financial condition, overstated business prospects, or engaged in improper practices. The motive is rarely hidden: drive the stock price down for the short-seller’s own financial gain.

The impact, however, extends far beyond short-term market volatility. In today’s litigation landscape, stockholder plaintiffs’ firms routinely seize upon short-seller reports as the “emergence of the truth” necessary to allege loss causation under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The interplay between activist short-sellers, securities plaintiffs’ la

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