Manuel P. Asensio

Manuel P. Asensio (born December 30, 1954 in La Habana, Cuba) is a money manager in New York City best known for his pioneering work as an activist short-seller. He is the founder, chairman and president of Asensio & Company, Inc. an investment firm established in 1992. In 2009 Asensio co-founded the Alliance for Economic Stability, Inc., a non-profit organization. Since 2000, Asensio and his firm have been subject to regulatory sanctions by the Financial Industry Regulatory Authority (FINRA).

He is the author of a book about his work entitled Sold Short: Uncovering Deception in the Markets.[1]

Education

Asensio earned a Bachelor of Science in Economics from the University of Pennsylvania's Wharton School and attended Harvard Business School, where he was the roommate of John Paulson.[2]

Career

While at Harvard, Asensio began proprietary trading, and established Boca Raton Investment Corp. as his own trading firm when he graduated in 1982.[3] He went to work for Bear Stearns in 1986.[3]

In 1992, he founded Asensio & Company.

As a short seller, Asensio sold companies short 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 52 companies he publicly campaigned against, the average decline in value was around 86 percent, wiping out $30 billion in market value, from which he grossed millions in profits.[4]

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."[4]

As of 2004, 11 of the 26 companies he shorted and campaigned against were delisted from stock exchange trading, went bankrupt, or otherwise failed, according to Asensio.[4]

In January 2014 the National Bureau of Economic Research published a behavioral finance article titled, "How Constraining Are Limits to Arbitrage? Evidence from a Recent Financial Innovation." The study identifies a "recent class of short sellers" and named Asensio among the pioneers of this type of short selling.

His short selling activities and public statements resulted in numerous lawsuits. Asensio claimed to have 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 found him guilty of misrepresentation without ordering a judgement, which resulted in the former National Assn. of Securities Dealers, now FINRA, imposing a fine and disbanding his broker-dealer operation.[4]

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.[5]

In July 2006, the National Adjudicatory Council of the NASD upheld a hearing panel's ruling[6] 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.[7][8] Asensio denied any wrongdoing [8] and 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.[9]

References

  1. ↑ Asensio, Manuel (April 15, 2001). Sold Short: Uncovering Deception in the Market. Wiley. ISBN 978-0-471-38338-3.
  2. ↑ Zuckerman, Gregory (November 3, 2009). The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History. Broadway Business. p. 36. ISBN 978-0-385-52991-4.
  3. 1 2 Asensio, Manuel (April 15, 2001). Sold Short: Uncovering Deception in the Market. Wiley. pp. 25–26. ISBN 978-0-471-38338-3.
  4. 1 2 3 4 Geracioti, David (2004-06-01). "Crusader or Bully?". Registered Representative. Retrieved 2009-10-30.
  5. ↑ "NASD Regulation Sanctions Asensio & Company; Manuel Asensio, for Short Selling, Trade Reporting, and Internet Advertising Violations". NASD Regulation. 2000-11-29. Retrieved 2009-10-27.
  6. ↑ http://www.finra.org/web/groups/industry/@ip/@enf/@adj/documents/ohodecisions/p013655.pdf FINRA 2005-01-04. Retrieved 2010-03-20
  7. ↑ "Disciplinary and Other Administrative Actions, p.2" (PDF). NASD. October 2006. Retrieved 2009-10-27.
  8. 1 2 "In the Matter of Department of Enforcement, complainant, Against Asensio Brokerage Services Inc. n/k/a Integral Securities, Inc., New York, NY, and Manuel Peter Asensio" (PDF). FINRA. 2006-07-28. Retrieved 2009-04-14.
  9. ↑ "Disciplinary and Other FINRA Actions, p. 19" (PDF). FINRA. October 2007. Retrieved 2009-09-13.

External links

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