While leading his hedge fund, Republican candidate for the U.S. Senate in Pennsylvania, David McCormick, shorted the stock of Pennsylvania's own companies, CNN reported Wednesday.
McCormick was the CEO of Bridgewater Associates, one of the world's largest hedge funds. During his time at the helm, he "shorted the stocks of nearly 50 companies headquartered in Pennsylvania," CNN reported.
While many people buy stocks hoping that they'll go up, some do the opposite.
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"Short selling involves borrowing a security whose price you think is going to fall and then selling it on the open market. You then buy the same stock back later, hopefully for a lower price than you initially sold it for, return the borrowed stock to your broker, and pocket the difference," the Charles Schwab website explains.
The U.S. Securities and Exchanges Commission published a report on its website by financial markets innovator Walter Cruttenden on the matter. According to Cruttenden, "It is widely agreed that excessive short sale activity can cause sudden price declines, which can undermine investor confidence, depress the market value of a company's shares, and make it more difficult for that company to raise capital, expand and create jobs."
So, while Pennsylvania was fighting through the COVID-19 pandemic and losing jobs, McCormick was trying to make more money off the backs of the state's biggest employers, like The Hershey Company and US Steel, the report suggests.
CNN said that as recently as last year, McCormick was bragging he was making all of the decisions for Bridgewater's investments. Now, his campaign is saying that he wasn't involved in the day-to-day.
“I was the CEO, so whatever we did, I’m responsible for,” he said at a 2023 event.
“To be someone who does something like that and have the gall to run for public office and seek votes from the people you were betting on to fail – that takes a lot of nerve,” Bernie Hall, the Pennsylvania director for United Steelworkers, told CNN.
The report noted that local Pennsylvania media is also calling into question whether McCormick helped create hundreds of jobs when he led a software company in the early 2000s.
