Nate Anderson, the founder of Hindenburg Research, recently announced the closure of his nearly eight-year-old activist short-selling firm. However, the company, which gained global attention in 2023 for its critical report on Gautam Adani’s conglomerate, now faces allegations of collusion with hedge funds in preparing bearish reports.
According to a report by a Canadian portal, Market Frauds, court documents from a defamation lawsuit filed in the Ontario Superior Court of Justice suggest that Anderson collaborated with Moez Kassam, the head of Canada’s Anson Funds. The documents reportedly indicate that Hindenburg and Anson worked together on crafting bearish reports targeting companies, raising questions about securities fraud.
Court Documents Point to Alleged Collusion
Anson Funds’ Kassam admitted in court filings to sharing research with “a wide variety of sources,” including Anderson. The portal claims that email exchanges between Anderson and Anson show that Anderson had limited editorial control and was guided by Anson on the content, price targets, and timing of reports.
Market Frauds shared screenshots of these alleged emails, claiming they provide evidence of collaboration. “He [Anderson] asked them multiple times if they needed ‘more.’ From the exchanges, it appears that at no time did he have editorial independence,” the report alleges.
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The US Securities and Exchange Commission (SEC) could charge such activities as securities fraud if reports are crafted with undisclosed participation by hedge funds, which might also place parallel short bets. The SEC has previously taken action against Anson Funds for failing to disclose payments to publishers of bearish research, resulting in a $2.25 million settlement in June 2024.
Market Frauds suggests that the evidence in the Ontario court filings could lead to charges against both Anson and Anderson. “It is almost a certainty that when the whole exchange reaches the SEC, Nate Anderson will be charged with securities fraud in 2025,” the portal claimed.
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Hindenburg Research has denied any lack of independence, stating that it receives “hundreds of leads each year from diverse sources,” including whistleblowers and industry experts. “We rigorously vet each lead and have always maintained full editorial independence over our work,” the firm said in response to similar allegations.
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