By Chris Prentice
WASHINGTON (Reuters) - You may not have heard of Joshua Mitts, a young Columbia University professor who is making some powerful enemies on Wall Street.
The 36-year-old securities law specialist has become an increasingly influential figure in the hot debate over activist short selling since publishing a 2018 analysis of trading data that suggested some players were manipulating the market.
Interviews with 12 people familiar with his work and career, including Mitts himself and some of his toughest critics, shed light on how an academic little known outside his field just a few years ago has since taken center stage in the ugly feud between short sellers and the companies they target.
That struggle has sparked a sprawling probe by the U.S. Department of Justice and the Securities and Exchange Commission (SEC) into suspected trading manipulation by short sellers and hedge funds.
Activist short sellers like Muddy Waters' Carson Block bet against public companies they deem over-valued and then publish their investment thesis. They say their work aids market efficiency and dispute Mitts' analysis as flawed.
Nonetheless the interviews, which detail Mitts' contacts with U.S. authorities, show the professor and his work have played a significant role in the federal probes.
"One reason the work really resonated was it took a large sample and showed there was evidence for what companies were saying: that there was potential abuse," said Peter Molk, a law professor at the University of Florida.
Mitts declined to comment on his work for the Justice Department beyond pointing to a statement on his resume that he has "extensive experience supporting" the agency. He defended his research and said he wanted to be objective and is not opposed to short selling.
"Not only is short selling not illegal, it's important to have bears," he said.
Spokespeople for the Justice Department and the SEC, the main stock market regulator, declined to comment.