Earlier quoted context omitted.
Matt Levine wrote about this recently, and comes to a somewhat different conclusion (though he's not a lawyer): https://www.bloomberg.com/view/articles/2018-02-09/can-noisy... > If you think a company is bad, or fraudulent, you can sell its stock short and try to profit when everyone discovers its problems and the stock drops. If you want to hurry that process along, you can always noisily publish research reports ex…
But he more or less assumes that you are stating an opinion on the company, rather than misrepresenting or downright inventing bad news.
On the other hand, it seems that uncovering new true information, and then taking a short position on it, not illegal.
A lot of the comments in this thread were assuming that there was some crime just from reporting the bad news and trading on it, unconditionally on whether or not the news was true.