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Inside the Always Nasty, Frequently Sexist, and Often Litigious World of Financial Twitter
The trading floor of old has moved online, and the outcome is exactly as you’d expect.
Let’s call her Jane Doe — because she’s afraid that if we use her real name, it will happen again. Last year, on a lark, she decided to join Twitter. An executive in the asset management industry, Doe thought the dialogue with some heavy hitters was interesting, and she quickly found her Twitter voice — sassy and irreverent.
Within months her anonymous Twitter handle had amassed thousands of followers. Then one day, out of the blue, she got a direct message from another anonymous tweeter who told her that people were trying to figure out who she was — and that there would be serious repercussions if they did.
“I was warned that there was a group of people trying to figure out all my personal info to ‘ruin my life,’ ” the woman explained in a direct message to this writer.
She went through her tweet history to see who she might have “called out in a way that warranted this kind of attention.” But she couldn’t find a thing. “On this account I never once ‘went after’ a single person, and yet I received a fair amount of harassment.”
Doe did not know the person who had messaged her, but initially thought he was just trying to protect her — that is, until a few days later, when he contacted her again. This time he asked if she was actually someone else — a real person on Twitter.
“My BS meter went off,” says Doe, who now realizes he was the one who wanted to know who she was, for reasons she still cannot fathom.
Jane Doe is not this woman’s Twitter handle. Even though she was anonymous on Twitter, she fears that revealing even that handle could affect her job, her career — and her ability to support her family. Unbeknownst to her, Institutional Investor can report that the man who contacted her has ties to well-known short-sellers, a failed hedge fund, an alleged scam, and a few journalists — as well as a record of harassing women on Twitter and via email. She asked that we not reveal his handle either.
Financial Twitter — like much of Twitter in general — is rife with anonymous voices spewing foul, even hateful language. It can be a dangerous place for many people — and not just women, though #metoo moments regularly happen there.
At a time when even the president of the United States’ tweets contain vicious and false statements, it should not be surprising that the same is true for Financial Twitter — also known as FinTwit — which has its share of blowhards, bullies, and bots.
“It’s like graffiti on the bathroom wall,” says ex-con-turned-fraud-consultant Sam Antar, who has gotten into a Twitter war of words with well-known short-seller Marc Cohodes over a disagreement about Overstock.com, a stock Cohodes is touting after previously betting against it.
At the same time, the social media site has become an indispensable tool for market participants as well as journalists, both as a place to disseminate information and to learn what’s going on the world, a modern-day news feed. For many it’s also a place to let off steam or try to share a view of the world — or at least to tout, or slam, a stock.
For the most part, the Twitterati shrug. “Twitter is the opportunity to swim in the ocean; of course there’s danger,” says Josh Brown, the CEO of Ritholtz Wealth Management, who has called himself “the chairman of the Twitter Federal Reserve” and tweets under the handle @reformedbroker, last year reaching the milestone of
1 million followers. The upside, according to Brown? “Some of the smartest people are on Twitter.”
Big names in the financial industry are regulars. AQR Capital Management co-founder Cliff Asness is a constant presence, discussing finance, defending quants, and occasionally arguing politics. (“I don’t know what the opposite of meditation is, but I’m pretty sure it looks something like Twitter,” he recently quipped in a tweet.)
Bigwigs like outgoing Goldman Sachs CEO Lloyd Blankfein and former PIMCO executive Mohammed El-Erian are among the financial elite who tweet. The presence of these people has given Twitter a democratic feel that appeals to its aficionados.
“Where else,” says Brown, “can an average investor log onto a website and communicate directly with Mohamed El-Erian?”
More to the point, Twitter is a direct way for heavy hitters to bypass the media — and any critical analysis it might make of their statements. That seems to be the preferred communication method of Bridgewater Associates founder Ray Dalio, who uses Twitter to promote his controversial way of doing business and his book Principles. Then there’s activist investor Carl Icahn, who uses Twitter to advertise his appearances on CNBC and post links to Securities and Exchange Commission filings on his activist battles, often immediately causing the stock in question to soar.
For smaller players, including some hedge fund managers and investors, FinTwit has replaced the message boards and Wall Street gossip of earlier eras at a time when there are few trading floors (and no boundaries) left.
“If you Google a picture of the UBS trading floor, that was a magnificent state-of-the-art trading floor completed in 2007,” says Brown. Now it’s empty. The exchanges and futures trading pits, other places where people intermingled, are also gone. “Guys have been scattered to the four winds, but they still want to chatter.”
No one would argue that the trading floor of the past was a place of decorum. But though the talk may have been rude and crude, the commentary was confined to the people within earshot. Twitter messages on the internet have a wider reach, and the cloak of anonymity exacerbates the lack of accountability.
“People scream and yell at each other in real life,” says Brown. “But in real life you don’t have anonymous people coming up and challenging everything you say. In real life you can see their face.”
Some of the more egregious behavior makes finance professionals cringe, including co-workers, partners, and investors. Says one allocator: “Many of us look at funds we deploy capital to as partners. Sometimes the behavior makes me pause and wonder if an LP would really want to invest with someone who would act like that.”
They might ask themselves the same question about public companies — such as the one run by Elon Musk.
One way to spook potential investors if you’re the CEO of a large corporation might be to question whether a journalist who is critical of your company is breaking the law — or worse, to call a critic a pedophile.
Tesla CEO Musk has done both. The electric carmaker is perhaps the most volatile Twitter topic these days, with both short-sellers — investors who bet that a stock will decline — and Musk on the attack. Musk is prone to lashing out; for years he has been railing against both the media and short-sellers in tirades that sometimes send Tesla’s stock down.
As Tesla’s problems mounted this summer, he took it up a notch, mentioning well-known short-seller Jim Chanos of Kynikos Associates by name, along with reporter Linette Lopez of Business Insider, who has recently written several stories that were critical of the electric carmaker. Whereas savvy corporate chieftains (and hedge fund managers) might have their lawyers contact media organizations behind the scenes to threaten litigation, Musk is, unusually, taking his battle to the Twittersphere.
In a series of tweets on July 5, Musk accused Lopez of writing a “love letter puff piece” on Chanos’s cufflinks and even suggested illegal activity on her part: “You stated publicly that you ‘see eye to eye’ with Chanos, the most prominent short-seller of Tesla. Have you ever provided him with material non-public information about Tesla?” Musk also questioned whether she offered a bribe to a Tesla whistle-blower who has admitted feeding Lopez information.
When asked point-blank by Scott Wapner on CNBC if she had compensated the whistle-blower, Lopez immediately replied, “Absolutely not,” adding, “I would prefer to talk about the
reporting. . . . It’s up to shareholders to decide whether or not the CEO of a $50 [billion] company should spend his time yelling at reporters on Twitter.” (Chanos and Lopez have both denied that she supplied the short-seller with information; neither returned requests for additional comment from II. A spokesman for Tesla declined to comment further, and Tesla stock — which fell sharply when Musk accused a Thai cave rescuer, who had dared to criticize him, of pedophilia — recovered only to fall again on more bad news. It’s now down more than 4 percent since the first of these tweet storms.)
Musk, of course, is not alone in attacking others on Twitter.
Tesla and its founder have endured a steady stream of negative tweets from people like Mark Spiegel, who runs a small hedge fund called Stanphyl Capital Management that has a big short bet against Tesla. Spiegel, with 10,500 Twitter followers, is one of the most loquacious and hostile Tesla critics, which he admits is possible only because there are no institutional investors in his fund.
For years, Spiegel has been calling Musk a “subsidy fraud boy” and a “pathological liar.” He has used the word “fraud” to describe Tesla more than 70 times just since May.
Spiegel is touchy about it. In an emailed response to a request for comment, he wrote, “You'd better not quote my ‘fraud’ Tweets out of context: I've never accused Tesla of making up the bottom line losses. To be specific, I accuse them of posting a fraudulently high gross margin by under-reserving for warranty costs, and Musk of making fraudulent statements about timeliness, demand, and profitability for his products, and those accusations are well documented in [a] shareholder lawsuit.”
Many of Spiegel’s “fraud” tweets, however, do not mention any of that context.
The frequency with which the word “fraud” is used (and not just by Spiegel) is a pet peeve of former journalist Herb Greenberg, a co-founder of Pacific Square Research, an independent research firm.
“My issue with Twitter, as a former journalist, is that there are no rules of engagement,” says Greenberg. “As a journalist, there are certain things you cannot say. You can’t call someone a crook or say that they are engaged in fraud” without a legal finding.
But when big money is at stake, it seems nothing is out of bounds.
One man testing those bounds is Bronte Capital co-founder and CIO John Hempton, an Australian hedge fund manager who has approximately 29,000 followers and a relatively small amount of assets under management, with Bronte’s flagship Australian fund approaching AU$750 million ($556 million), according to a recent letter to investors.
Hempton makes up for the fund’s small size by being one of the most aggressive voices on social media.
In recent years the list of people who’ve been subject to his Twitter attention is long. Among them are numerous critics of multilevel marketing company Herbalife, which he proclaimed to be a “national treasure”; Corvus Fund Management managing director William Brennan, who has bet against Overstock.com, which led Hempton to question his returns; and a board member of Australian asset management firm Blue Sky Alternative Investments, who claims Hempton harassed her with Twitter direct messages.
On Twitter, Hempton has called more than a dozen people who have criticized Herbalife racists. Hempton — who has been a long-standing and vocal Herbalife investor, arguing it helps, not hurts, those in the Hispanic community — believes that racism was the core flaw in Pershing Square Capital Management CEO Bill Ackman’s short thesis, a view that the Federal Trade Commission apparently does not share. After receiving more than 1,000 complaints about Herbalife filed by Hispanics, among others, the FTC forced the company to “fundamentally restructure its business” as part of a massive settlement in 2016.
Women — including this writer — have often been the focus of Hempton’s tweets.
When Ackman’s independent researcher, Christine Richard, who had exhaustively investigated Herbalife for more than five years, did not stop writing about the company even after Ackman exited his short position, Hempton seemed perplexed.
“Now you are not being paid for it. You have become a racist for free,” he tweeted to Richard on April 22.
Julie Contreras, a 53-year-old Mexican-American human rights activist, is one person who would seem an unlikely recipient of Hempton’s online accusations of racism. But even she couldn’t escape them.
“It’s funny coming from somebody like him, who lives in a lily-white world, trying to reverse the rhetoric,” says Contreras, who helped dozens of Herbalife members in her community file complaints with the FTC, which has paid 350,000 victims of Herbalife restitution from the $200 million it received from the multilevel marketing company as part of its settlement of the FTC complaint that it was deceiving those who joined Herbalife.
Contreras says that not only has Hempton constantly tweeted at her (most recently on July 19), he has also emailed her several times. “Sometimes he’s relentless, like he’s nonstop. He has nothing better to do.”
On March 14, 2017, the tweets to Contreras became more serious. At a time when undocumented immigrants were in fear of being apprehended by U.S. Immigration and Customs Enforcement, Hempton tweeted at Contreras: “If you insist on lying, I will encourage Mother [an anonymous Twitter handle who had already threatened to call ICE on Contreras] to get your people deported.” Then, to the person he calls Mother, Hempton added, “Can you find any illegals in Julie's team. You need to save her people from her racist lies.”
Contreras says she immediately contacted both the Federal Bureau of Investigation and Homeland Security. Then the Waukegan, Illinois, Our Lady of Supaya Sanctuary church, where Contreras is a Methodist pastor, started keeping its doors locked at all times. Some 16 months later they’re still taking that precaution. Contreras calls Hempton’s Twitter tactics “psychological warfare.”
One might wonder why Hempton, who is known for his smart analysis, resorts to such commentary. Noting the focus on women, Richard says, “Sometimes when women have strongly held opinions and they express those opinions publicly, that can enrage a certain kind of man.”
Herbalife critics aren’t the only ones whom Hempton has singled out. Recently he was accused of harassing Blue Sky director Elaine Stead following a critical report by short-selling research firm Glaucus Research, according to an April 6 report in the Australian Financial Review. Stead, who heads venture capital at Blue Sky, told AFR that she had received 80 direct messages on Twitter from Hempton.
“I thought it was harassment and bullying,” she is quoted as saying.
For his part, Hempton said on Twitter, “I recommended to her — rather insistently — that she should get her own lawyer — and the consequences for not doing so might be rather dire.”
Blue Sky, whose stock fell on the Glaucus report, declined to comment further on the matter. But according to the Australian news report, after a number of messages from Hempton to which Stead did not respond, he sent her even more, “many of which were defamatory.”
His efforts seem to be working. Since then, Stead remains head of venture capital at Blue Sky but has resigned from its board and deleted her Twitter account. Hempton’s fund, according to its website, has annualized returns of 12.6 percent over the past three years.
A different dynamic seems to be occurring with former hedge fund manager Cohodes, who portrays himself as a fraud buster. Some of Cohodes’s recent calls, including his long bet on online retailer Overstock.com, don’t seem to be working out too well. The stock is down more than 44 percent this year.
But his bet getting the most attention is a winner: MiMedx Group, a Marietta, Georgia, biopharmaceuticals company whose CEO, Parker Petit, recently stepped down amid SEC and U.S. Department of Justice scrutiny of its accounting practices. The stock faces a possible delisting on the Nasdaq stock market.
As is common for some short-sellers, Cohodes waged a relentless war against Petit, most of it on Twitter. Last fall, Cohodes tweeted, “I will bury the little fella in a shoebox.” The FBI appears to have interpreted the tweet as a death threat: FBI agents went to Cohodes’s home after he sent it and another the bureau deemed threatening.
“The reference to burying the little fella was to Marc’s belief that the truth would out and Parker Petit would be exposed,” wrote Cohodes’s attorney, David Shapiro, in an email to Institutional Investor. “In the context of the ongoing back-and-forth, it was clear that the reference to ‘bury’ was metaphorical and not a threat at all.”
For his part, Cohodes has been the subject of vicious tweets from people on the other side of the MiMedx trade, including personal attacks.
But it’s his about-face on Overstock that has infuriated Antar, the fraud consultant.
Shapiro noted in an email to II that Cohodes more recently concluded that the company was a good investment because of changes in its business model. “If anything, the sequence of events demonstrates Marc’s ability to fairly evaluate business models and not be weighed down by insults,” Shapiro wrote.
The upshot is a Twitter battle among Cohodes and a coterie of Overstock critics, including Antar, who is also his former friend.
Antar says he is most upset that Cohodes brought up the death of Antar’s son. On December 2 of last year, Cohodes tweeted, “I supported Sam when he needed me most during his son’s death. His behavior is awful.”
The tweet made Antar furious. “Invoking the memory of my son to disparage me is the most scummiest thing anybody could ever do, just to promote a stock position,” he says.
Cohodes’s lawyer sees it differently. “I and others were with Sam at Marc’s wedding party in September 2014, where Sam spoke to me and others about his loss, and also about how appreciative he was of Marc’s support,” Shapiro wrote in the email.
Antar says that isn’t true. “My son’s death was never mentioned at the wedding,” he says, claiming that's because the wedding happened before his son died.* He continues to dispute the assertion that Cohodes was supportive. “I sat shiva; he wasn’t there. We had a memorial 30 days later, and he wasn’t there.”
When Cohodes and Hempton were asked for comment for this article, both men immediately turned the conversation, instead, to this writer.
“You are biased and have made false statements about me in the past,” wrote Cohodes in an email, without citing specifics. Cohodes — who has been a source of mine, as he has for other reporters — has blocked and unblocked me several times on Twitter. At one point last year, we reached an agreement “to apologize for ruffling each other’s feathers,” and he tweeted that we have fought “like Cats & Dogs over the years but can always hash it out. She does try to get it right as do I.” (He has since blocked me again.)
In the email, Cohodes suggested a conference call with his lawyer, Institutional Investor editor-in-chief Kip McDaniel, II’s lawyer, and me. When I tried, via email, to arrange a call between Cohodes, his attorney, and me, Shapiro wrote back: “Please stop emailing Marc. It’s turning into harassment.”
As for Hempton, he and I have not spoken since early 2013, when he hung up on me during an interview after I asked him questions about a blog post he had written about Herbalife. Since then, I’ve occasionally commented critically on Twitter about his Herbalife views. Hempton has called me a racist, among other pejoratives.
In an email response to a request for comment on this story, he cc’ed more than 100 financial journalists, at The Wall Street Journal, The New York Times, and Bloomberg, among others.
“Since last time I gave you a comment to a story without circulating it widely in advance I was actively misquoted I have decided to circulate this to every person marked as a journalist in my contacts list,” he wrote. It is the second time Hempton has used this tactic with me.
In the group email, Hempton posted an old, poorly worded tweet of mine stating that “religion is what is wrong with the world.” It was about turmoil in the Middle East, and I realized it could be misinterpreted, so I deleted it years ago. Hempton uses it quite often to claim I am anti-Semitic.
And for the first time, without evidence, he makes the claim in the group email that anti-Semitism is “more widespread” than racism among the “anti-Herbalife crowd.” But the most prominent Herbalife short-seller of all time — Ackman — is Jewish, and Herbalife’s critics come from all walks of life, as do its supporters.
Hempton also made a derogatory comment I believe was meant to hurt my career, as he has done to others mentioned in this article.
“How it is possible that you have a job in New York journalism when so many fine journalists are out of work,” he wondered.
Separately, he requested that McDaniel follow him on Twitter and then sent him, via a direct message, a link to a Wikipedia page about a seminal internet publishing case, Dow Jones v. Gutnick, that “effectively allows” that “defamation plaintiffs in Australia could sue for defamation on the Internet against any defendant irrespective of their location.”
Hempton, as noted earlier, lives in Australia.
Seasoned Twitter hands like Josh Brown say the best thing is to ignore the war zones.
“There are little enclaves within financial Twitter that are absolutely knockdown battles 24 hours a day,” he explains. “The more volatile an asset, the more volatile the comments. There are these little cul-de-sacs, if you’re just going down Twitter, then [if] you accidentally say something that pulls you into one of these alleyways, you could get jumped,” he warns.
Of course, it’s easy to make stupid statements in the heat of the moment, and apologies, retractions, and deletions are routine on Twitter. When people refuse to confront their Twitter antagonists — or pretend they don’t exist by blocking or muting them — the antagonists seem only to be emboldened. Fearing their wrath, or wanting their favor, has kept many from speaking out, including a few people approached for this article.
One person who has had enough is Chris Irons, who tweets under the handle Quoth the Raven, or QTRResearch. He has 33,800 followers and is one of the most vocal short-seller critics of Herbalife on Twitter. In addition to calling Irons a racist, Hempton has referred to him as a “career fraudster, a “career stock promoter,” and a “crook.”
“All three are wholly untrue and therefore libelous,” says Irons, a senior business writer and equity analyst with research firm GeoInvesting.
“People who insult people online or take personal shots at them because they disagree with their investment thesis are cowards,” he adds. “I would expect anybody who takes a personal shot at me or defames me online to have the fortitude to say the same thing to my face.”
Recently, both Irons and Hempton were in New York at the same time. Irons, tired of interacting solely online, extended an invitation to meet in person.
*After this story was published, Antar produced emails and text messages indicating that the wedding party happened in September 2013, not 2014 — prior to his son’s death in October 2013 and contrary to what Shapiro told Institutional Investor. He said he realized he had misspoken when he originally told this publication that his son’s death was one year after the wedding and requested a correction to his quote, which has been made. Shapiro did not respond to an emailed request for comment.