Tom Matzzie, former Washington Director of Moveon.org, has taken a surprising stand against short seller Steve Eisman, who has been railing against the for-profit higher education industry recently. In an article for The Huffington Post, Matzzie criticizes Congress for enabling the short seller to use the political process to drive down the price of higher ed stocks in order to profit:
While he is free to invest how he sees fit, the U.S. Senate HELP Committee shouldn't set the stage to help him cheer declining stock prices. Neither should any other part of the U.S government.
Steven Eisman wants the regulation of higher education to get rich -- not because it will be good for students or the schools. And now this hedge fund manager is leveraging a U.S. Senate hearing to take more short-selling profits.
A short-seller investor will always have a conflict of interest when speaking about a set of companies and that is why it is inappropriate to invite Eisman as an expert witness. He will typically always want to portray those companies in a bad light in order to generate news that would drive down their stock prices. His financial conflict of interest biases his testimony beyond redemption.
Could the committee possibly expect unbiased testimony? No. Eisman has staked a fortune on government action against higher education companies.
inviting Steven Eisman to a HELP Committee hearing on a sector he is short selling is like asking an arsonist whether a building will burn down. He'll say, "Yes" but that is because he plans to burn it down.
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