We examine equity short selling in U.S. firms whose banks were closed by the FDIC in September 2009 to December 2011. Short positions increase dramatically (more than double) in the year prior to bank failure. The firms are more likely to have high short interest than are other banks or other exchange-listed firms, and positions intensify during the year. Daily short selling is abnormally high in the 20 trading days prior to bank failure and highest in the final week.  Our results for the final week suggest short sellers either have an uncanny talent for timing their trades, or possibly more likely, are privy to information leaks of impending bank failures.  Our findings raise a number of questions for bank and securities regulators.