'I regret any harm:' Short seller compensates real estate firm after he wiped 40% off its value by publishing a report falsely claiming it was at risk of insolvency, tanking the firm's shares by $115 million

 A short seller must pay a real estate investment trust a 'multiple' of its profits after causing its value to plummet by $115 million after falsely claiming it was at risk of insolvency.  

Quinton Mathews, who published his research on companies online under the pseudonym Rota Fortunae, will pay Farmland Partners Inc 'a multiple' of the profits on his short bet in 2018, according to the terms of the legal settlement announced late Sunday. 

His research had helped wipe out as much as $115 million off Farmland's market value - 39 per cent of what the firm was then worth. 

Quinton Mathews, a small investor from Texas caused shares of a real estate investment trust to plunge 39 percent in one day in 2018

Quinton Mathews, a small investor from Texas caused shares of a real estate investment trust to plunge 39 percent in one day in 2018

The parties declined or did not respond to requests for comment on the exact value of the settlement.

Mathews conceded that 'many of the key statements' in a report he published on website Seeking Alpha targeting Farmland - including allegations of dubious  transactions and the risk of insolvency - were wrong.

'I regret any harm the article and its inaccuracies caused,' Mathews said in the announcement, which was posted on Twitter and Seeking Alpha.

Paul Pittman, Farmland's chief executive officer, said in a statement that 'investors already recognize that the company was the victim of a short and distort scheme.'

Mathews, who tweeted as Rota Fortunae has agreed to pay company restitution to settle a lawsuit against him. He will pay Farmland Partners 'a multiple' of the profits on his short bet in 2018

Mathews, who tweeted as Rota Fortunae has agreed to pay company restitution to settle a lawsuit against him. He will pay Farmland Partners 'a multiple' of the profits on his short bet in 2018 

Farmland shares traded at around $12.50 on Monday afternoon, up from around $5 following the short campaign. 

The company has produced trailing total returns of 12.5% over the last three years, about 10 percentage points lower than the specialty REIT sector, according to a Morningstar tracker.

Jacob Frenkel, an attorney with Dickinson Wright who has defended companies against allegations of stock manipulation and was not involved in the Farmland case, said Mathews' apology and payment could build company confidence to pursue similar claims against short sellers.

'It's highly unusual and refreshing to see a company take on this fight, because most will take the short term blow of the attack without pursuing legal vindication,' Frenkel said.

Mathews' research was put together in a report that he published and helped wipe out as much as $115 million off Farmland's market value

Mathews' research was put together in a report that he published and helped wipe out as much as $115 million off Farmland's market value

Rodolfo Hernandez, Seeking Alpha's current managing editor, declined to comment. George Moriarty, the former executive editor of Seeking Alpha, told Reuters in 2019 that courts had respected the website´s status as a neutral platform, and that its staff vetted all posts.

Mathews runs a one-person investigative research business, Dallas area-based QKM LLC, and has published more than a dozen articles on Seeking Alpha.

Farmland's litigation against a hedge fund firm that paid Mathews for research, Sabrepoint Capital Management LP, continues. Sabrepoint founder George Baxter said his firm had nothing to do with the Seeking Alpha article and that it would 'defend itself and its employees vigorously against Farmland's frivolous claims.'

The win paves the way for other investment firms to sue short sellers they accuse of falsely targeting their company's reputations in the hopes of making money.  

'I regret any harm:' Short seller compensates real estate firm after he wiped 40% off its value by publishing a report falsely claiming it was at risk of insolvency, tanking the firm's shares by $115 million 'I regret any harm:' Short seller compensates real estate firm after he wiped 40% off its value by publishing a report falsely claiming it was at risk of insolvency, tanking the firm's shares by $115 million Reviewed by STATION GOSSIP on 04:49 Rating: 5

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