Manuel P. Asensio
Encyclopedia
Manuel P. Asensio is a money manager in New York
best known for his work as an activist short-seller. Since 2000, Asensio and his firm have been subject to regulatory sanctions by the Financial Industry Regulatory Authority
(FINRA).
He is also the author of a book about his work entitled Sold Short: Uncovering Deception in the Markets.
Asensio earned a Bachelors of Science in Economics degree from the University of Pennsylvania’s Wharton School and attended Harvard Business School
where he was the roommate of John Paulson
. He traded while a student at Harvard Business School, and established Boca Raton Investment Corp. as his own trading firm when he graduated in 1982. He went to work for Bear Stearns
in 1986.
companies he believed to be engaging in fraud, and was noted for publicizing his negative opinions. He made claims of fraud or misrepresentation involving 26 companies as of 2004. According to Asensio, of the 26 companies he publicly campaigned against, the average decline in value was around 86 percent, wiping out $30 billion dollars in market value, from which he grossed millions in profits.
Prior to making a short sale, Asensio would look at statements made by the company, to determine if they are flawed, and if claims made by the company can be verified. Asensio said in a 2004 magazine interview that "If there's a big variance between that and with what the company is saying, which we know is not right, it is reflected in the stock price that attracts us to a market. If you do identify a security that's trading significantly above its fundamental value and if there are a set of representations made by a company which you find to be faulty, and that those representations impact the stock price, you will make money. If you have the sophistication to be able to trade, you will be able to make a substantial amount of money."
As of 2004, of the 26 companies he shorted and campaigned against, eleven were delisted from stock exchange trading or went bankrupt or otherwise failed, according to Asensio.
His short selling activities and public statements resulted in numerous lawsuits. Asensio said that he had been sued for $1 billion in seven states as of 2004, and spent around $10 million defending himself, but had yet to lose a monetary judgment. One jury had found him guilty of misrepresentation
without ordering a judgement. That resulted in the former National Assn. of Securities Dealers
, now FINRA, imposing a fine and disbanding his broker-dealer
operation.
In July 2006, the National Adjudicatory Council of the NASD upheld a hearing panel's ruling that barred Asensio "from association with any NASD member in any capacity" and fined him $20,000. The NASD barred Asensio and his firm for failing to respond to requests for information. It found that Asensio made statements in research reports that criticized PolyMedica Corp. that were "misleading," by stating incorrectly that he was shorting the company when he was not, and by making similar disclosure rule violations. Asensio denied wrongdoing. All appeals were denied.
In August 2007, Asensio Brokerage Services, Inc. nka Integral Securities, Inc. was expelled by FINRA for failure to pay fines and/or costs.
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
best known for his work as an activist short-seller. Since 2000, Asensio and his firm have been subject to regulatory sanctions by the Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
(FINRA).
He is also the author of a book about his work entitled Sold Short: Uncovering Deception in the Markets.
Asensio earned a Bachelors of Science in Economics degree from the University of Pennsylvania’s Wharton School and attended Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
where he was the roommate of John Paulson
John Paulson
John Alfred Paulson is an American hedge fund manager, he is the founder and President of Paulson & Co., a New York-based hedge fund....
. He traded while a student at Harvard Business School, and established Boca Raton Investment Corp. as his own trading firm when he graduated in 1982. He went to work for Bear Stearns
Bear Stearns
The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession...
in 1986.
Short selling
As an activist short seller, Asensio sold shortShort selling
In finance, short selling is the practice of selling assets, usually securities, that have been borrowed from a third party with the intention of buying identical assets back at a later date to return to that third party...
companies he believed to be engaging in fraud, and was noted for publicizing his negative opinions. He made claims of fraud or misrepresentation involving 26 companies as of 2004. According to Asensio, of the 26 companies he publicly campaigned against, the average decline in value was around 86 percent, wiping out $30 billion dollars in market value, from which he grossed millions in profits.
Prior to making a short sale, Asensio would look at statements made by the company, to determine if they are flawed, and if claims made by the company can be verified. Asensio said in a 2004 magazine interview that "If there's a big variance between that and with what the company is saying, which we know is not right, it is reflected in the stock price that attracts us to a market. If you do identify a security that's trading significantly above its fundamental value and if there are a set of representations made by a company which you find to be faulty, and that those representations impact the stock price, you will make money. If you have the sophistication to be able to trade, you will be able to make a substantial amount of money."
As of 2004, of the 26 companies he shorted and campaigned against, eleven were delisted from stock exchange trading or went bankrupt or otherwise failed, according to Asensio.
His short selling activities and public statements resulted in numerous lawsuits. Asensio said that he had been sued for $1 billion in seven states as of 2004, and spent around $10 million defending himself, but had yet to lose a monetary judgment. One jury had found him guilty of misrepresentation
Misrepresentation
Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality...
without ordering a judgement. That resulted in the former National Assn. of Securities Dealers
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
, now FINRA, imposing a fine and disbanding his broker-dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
operation.
Regulatory sanctions
In November 2000, the NASD (now FINRA) sanctioned Asensio & Company Inc. and Manuel Asensio, for Short Selling, Trade Reporting, and Internet Advertising Violations.In July 2006, the National Adjudicatory Council of the NASD upheld a hearing panel's ruling that barred Asensio "from association with any NASD member in any capacity" and fined him $20,000. The NASD barred Asensio and his firm for failing to respond to requests for information. It found that Asensio made statements in research reports that criticized PolyMedica Corp. that were "misleading," by stating incorrectly that he was shorting the company when he was not, and by making similar disclosure rule violations. Asensio denied wrongdoing. All appeals were denied.
In August 2007, Asensio Brokerage Services, Inc. nka Integral Securities, Inc. was expelled by FINRA for failure to pay fines and/or costs.