Get rich quick, for real!
Here’s a great way to get rich — but it only works if you’re a trial lawyer, preferably a well-known one.
Here’s the idea: Short-sell a company’s stock. (For the financially unitiated: this means you sell stock you don’t own in the hope that its price will fall, whereupon you can buy “back” the stock for a lower price, return the borrowed stock to its owner (your broker) and keep the difference in price.)
Then, sue the company. When you announce the suit the stock price will probably drop. Buy the stock back at the lower price.
What’s great about this is, you don’t even need to actually win — or even complete — the lawsuit. You could just taken your profit when the stock price drops, then drop the lawsuit. It doesn’t matter if the suit is so frivilous it would be thrown out of court in — all that matters is that the hearing in which the cases is thrown out is held long enough after the announcement for the price drop to happen.
In fact, now that I think about it, you wouldn’t even have to actually sue — just make the anouncement! Of course, if you bluff more than a couple of times, the market might figure it out that your lawsuits don’t actually get filed — but other attorneys could still get away with it.
The real beauty of this is that no one will even know exactly who the victims are — they will be people who sold stock in the interval between the initial price drop, and the recovery after the lawsuit is dropped or lost. And what are they going to do, sue the lawyer who announced the initial suit? They probably can’t, since this appears to be completely legal.
Financial Rounds has a variant of this technique that might be even more “profitable.” Larry Ribstein has other interesting thoughts.
