Question: Jones has organized a proxy fight to take control of XYZ corporation. He purchases several million shares on the market (which he can vote) and simultaneously sells them short. Thus, disregarding the cost of arranging the deal (and its possible price effects), Jones is perfectly hedged. Every dollar rise (fall) in the stock price produces roughly a dollar fall (rise) in the value of his short position. Jones votes his shares and the board is changed. As a business strategy, should this behavior be legal? What if he pays to unwind his short position and continues to hold the shares he bought?