Recall the plight of Fairfax Financial Holdings, which sued a group of hedge funds and research analysts for $5 billion. The allegations were as one would expect: market manipulation to push down the stock price, phony negative research reports, and the like. The defendants included the likes of Steve Cohen. Fortune has done some digging and has come up with quite a tale. Were hedge funds  trying to destroy a company, ripping off small investors in the process? These kinds of stories are bad news for hedge funds because they tends to paint short-selling with a too-broad brush, making them evil destroyers of small cap companies. As it turns out, Fairfax may not be a pure victim of short sellers, the magazine says. It had some big problems all along. Perhaps the shorts were largely right? It all goes to show that these shorts vs. companies battles are not often cut and dried. This is all reminiscent of the Biovail controversy.

For more:
- here's the article from Fortune