Short-side stock manipulators are slippery and, by definition, dishonest. These people thrive on the internet, where they can anonymously spread misinformation and then away, with little fear of being held accountable. Still, on a few occasions, I’ve observed anonymous defenders of illegal naked short selling attempt to mount a philosophical defense of their actions. When they do, the best case they can make sounds like this:

“America’s capital markets are too large and complex for our regulators to handle. As a result, overvalued, scamming companies run rampant, defrauding investors. We, the naked short sellers, are doing the rest of you a favor by taking the law into our own hands in an effort to short these companies out of existence, or at the very least depress their share prices such that when they finally do fail, the rest of you will not lose as much as you would have. So you’re welcome.”

This silly idea is taken directly from anarcho-capitalism: an economic and political philosophy describing how market participants themselves, operating in the absence of government regulation, might find a profit motive in the maintenance of order.

To be fair, these “principled” naked short sellers and I do in fact agree on one matter: the fact that our markets are operating without an effective regulator. And I’ll also concede that there was a time when the rest of this anarcho-capitalist manifesto might have applied; specifically, many years ago, when manipulative short sellers limited their activities to micro-cap companies that were expert at selling: not goods or services, but stock. And because the world of penny stocks is recognized by all as a financial Wild West to begin with,…