Latest AFR Article, page-220

Even so, shorting the stock and then releasing information is not illegal. It's a strategy used by various activist investors/shorters throughout the world. Their information is from public sources or through interviews so there is nothing ilegal without releasing this information and there is nothing illegal about shorting a stock. If you put the two together, there is still nothing illegal about it because they are doing a good thing to keep the market honest. In some cases these organisations spends 10s of thousands of dollars on an investigation, which is in its self, an investment, a risky one. To pay for it, they short the stock.

I don't see anything wrong with it as long as the information they find is from public sources and is factual.