Wall Street and Alexandria Ocasio-Cortez are on the same side for once - they're piling skepticism onto credit-ratings firm Equifax
- Short selling positions in credit agency Equifax have spiked to their highest level since its data leak scandal in 2017.
- Alexandria Ocasio-Cortez has slammed the company as part of the "dice game" of privatized credit scoring.
- Part of motivation on part of short sellers may be relating to class action lawsuits resulting from a 2017 Equifax data breach, one of the largest in US history.
Short sellers are piling into bets against Equifax, one of the US's largest credit agencies, after class action lawsuits and criticism by Alexandria Ocasio-Cortez heightens focus on what the New York Democrat calls a "dice game."
Part of motivation on part of short sellers may be relating to class action lawsuits resulting from a 2017 Equifax data breach, one of the largest in US history.Bearish hedge funds have built up a $600 million short position in Equifax, according to data from IHS Markit. That's the highest amount since September 2017, when Equifax announced a data breach that could have jeopardized sensitive information from 143 million customers.
The shares have plummeted about 25% since. But IHS Market says the number of short positions in Equifax have increased alongside the company's share price in recent weeks.
The data breach put the role of private credit scores into the public consciousness, with Ocasio-Cortez taking to Twitter on February 9 to slam the industry:
The company was also sued by renowned short seller Carson Block, founder of Muddy Waters Capital, over the scandal.
A short seller borrows shares, sells them, waits for the stock to fall, then repurchases them at the lower price. The short seller then returns them to the lender and pockets the difference.
Equifax reports in early March. Business Insider has attempted to contact Equifax for comment.
Also a good moment to note that in the wake of the Equifax scandal, privatized credit scoring is a dice game & the credit score system is very broken too.- Alexandria Ocasio-Cortez (@AOC) February 9, 2019
If only someone could do a Financial Services hearing about that https://t.co/1jjrc2M50P