Cybersecurity firm Darktrace (DARK) has called in independent audit firm EY in response to stinging criticism of the business and its financials by short seller Quintessential Capital Management in late January.

Darktrace saw its share price fall nearly 20% in the immediate aftermath of QCM’s report, which alleges financial mismanagement and fraud, yet the stock has recovered quickly. During February
to date, Darktrace stock has rallied more than 30% to 275p.

‘Appointing an independent to review financial processes after such allegations is very unusual, and we struggle to remember a recent example like this in the tech segment of the LSE,’ said Tom Kennedy, analyst at research firm Megabuyte.

An award-winning artificial intelligence-led pioneer in the fast-growing cybersecurity industry, Darktrace has endured an erratic time on London’s stock markets since listing its shares at 250p in
April 2021.

Arts and crafts consumer platform Etsy (ETSY:NASDAQ) has also come under a short selling attack, accused of being ‘one of the largest counterfeiting platforms in the world.’

The allegations were made by Citron Research, which has previously targeted GameStop (GME:NYSE) in a shorting attack, where it hopes to profit from falls in target share prices. Citron was one of several short sellers that triggered the ‘meme’ stock craze two years ago.

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