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Serious question: Has anyone ever been jailed for publicly saying they've closed a short position but not actually closing it all?

Is it equally illegal to say on CNBC that you closed it out, but to email your investors and tell them you didn't?

Is the legal issue that you're misleading your investors or that you're manipulating the market? Both?

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The thing the SEC is going to take issue with is lying to investors. Investors have a right to know what's going on with their money.

And despite how it seems from outside Wall Street, hedge funds are definitely scared of the SEC. Banks worry less because their money is sourced differently. Hedge funds have to worry about legal action not just for the fines but also for scaring their investors. When individual investors are so large it only takes a few redemptions to significantly impact AUM.

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