Research on the Impact and Mechanism of Short Selling Mechanism on Corporate Financial Fraud

Taking Coretronic as an Example

Abstract

This paper focuses on the impact of the short - selling mechanism on corporate financial fraud, and conducts a case study on Coretronic. By analyzing the whole process of Coretronic being shorted, this paper deeply explores the impact and mechanism behind it. The study finds that the short - selling mechanism exposed Coretronic's financial fraud, leading to a sharp drop in its stock price, operational difficulties, damaged reputation and blocked financing. Mechanistically, it effectively restricts financial fraud through information disclosure, market constraints and regulatory promotion, providing valuable references for the improvement of capital market supervision and the prevention of financial fraud.