Industry TV Recap: ‘A Feedback Loop of Fakery’

The thing about cockroaches is that when you spot one, you’re probably seeing just the scouting party. JPMorgan Chase & Co.’s Jamie Dimon made this point last year in the wake of the First Brands Group and Tricolor Holdings scandals. Both companies, which existed in different corners of the automotive industry, were undone by obscure private-financing blunders. Now, Industry has provided us with a whole episode dedicated to financial bug-hunting.

In London we find Harper Stern (Myha’la) and Eric Tao (Ken Leung), the erstwhile principals of nascent fraud-busting hedge fund Stern Tao, in the middle of the type of crisis that often accompanies a particularly aggressive investment strategy, namely a short squeeze followed by a margin call. For the uninitiated, this can happen when you borrow and sell shares you don’t have in the hope you can replace them later—at a lower cost—when the price crashes. The risk, as Stern Tao soon discovers, is landing on the wrong side of a one-way bet when you have to replace the shares at an even higher price.