US short-seller Hindenburg Research has said it is not under investigation by the US SEC as it rubbished alleged links of its founder to a hedge fund for preparing reports targeting companies.
Photograph: Andrew Kelly/Reuters
“Hindenburg is not under investigation by the SEC, to our knowledge, and any suggestion to the contrary is false,” the firm said after a Canadian portal cited documents filed before a court in Ontario to allege that its founder Nate Anderson was under cloud for alleged links with hedge funds.
Citing a cache of documents filed at the Ontario Superior Court of Justice in a complex defamation lawsuit, the Market Frauds portal said the head of Canada’s Anson hedge fund, Moez Kassam admitted his firm has shared research “with a wide variety of sources” including Hindenburg’s Nate Anderson.
Hindenburg colluded with Anson while preparing a report.
The preparation of bearish reports without disclosure of participation can be charged as securities fraud by the US Securities and Exchange Commission (SEC).
Hindenburg said the report “is largely based on an anonymous Tongan blog that is rife with factual errors, wild theorizing, and demonstrates a complete lack of understanding of US law” and that it was “irresponsible” to “syndicate such rumours”.
While short sellers borrow security, sell it on the open market, and expect to repurchase it for less money after their damning report against the company brings stock down, involvement of hedge funds raises eyebrows as they could also place parallel bets, putting more downward pressure on stock prices.
“We know for a fact, from the email conversations between Anderson and Anson Funds, that he was indeed working for Anson and published whatever they told him to, from the price target to what should and shouldn’t be in the report.
“He asked them multiple times if they needed ‘more’. From what we can see in the dozens of exchanges, at no time did he have editorial control. He was being told what to publish,” the website claimed.
Market Frauds also shared screenshots of some email interactions – which it claims to have accessed through the documents available with the Ontario court – between Hindenburg and Anson to support its charge.
“There are multiple counts of securities fraud for both Anson Funds and Nate Anderson, and we have only gone through 5% of what’s in there as of the time of writing,” it said, adding, “From what we have read so far, it is almost a certainty that when the whole exchange between Hindenburg and Anson reaches the SEC, Nate Anderson will be charged with securities fraud in 2025.”
When the association first emerged, Anderson had in a post on X stated that Hindenburg “routinely get leads from all walks of life; including industry experts, analysts, investors, etc.
“Throughout our history, we independently vet any lead and always have full editorial control.”
In 2020, Hindenburg Research published a report on Facedrive, a Canadian company that went public through a reverse merger as an eco-friendly ride-sharing service, chiding it for being overvalued and lavishly paying promoters.
Anson allegedly exchanged emails with Anderson over the report and court documents reveal the hedge fund had knowledge of when the report was to be published.
The filings follow a separate years-long investigation by the US Justice Department and the Securities and Exchange Commission.
In June, Anson Funds Management and Anson Advisors Inc, without admitting or denying any wrongdoing, agreed to pay $2.25 million to settle SEC claims that they failed to tell clients about payments to outside publishers of bearish research.
Last week, Anderson announced the shutting down of Hindenburg Research, which made headlines globally in 2023 after publishing explosive reports about billionaire Gautam Adani’s conglomerate, sparking political rows and major losses for the company.
He didn’t share a specific reason for his decision but expressed a desire to spend more time with friends and family in the future.
“Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs.
“We shook some empires that we felt needed shaking,” he wrote announcing the decision.
