Anderson is being scrutinised for colluding with hedge funds to prepare reports targeting various companies. The report, based on a Canadian portal, cited documents filed before a court in Ontario.
News agency PTI reported that Hindenburg Research founder Nate Anderson, who announced last week that the short-selling firm’s operations would be shut down, could be charged with securities fraud.
Anderson is being scrutinised for colluding with hedge funds to prepare reports targeting various companies. Based on a Canadian portal, the report cited documents filed before a court in Ontario.
The portal stated that documents filed in a defamation case at the Ontario Superior Court revealed that Moez Kassam, head of Canada’s Anson hedge fund, admitted to sharing research with various sources, including Hindenburg’s Nate Anderson.
The Market Frauds portal, cited in the PTI report, said that the court documents “allegedly revealed” Hindenburg Research “colluded with Anson” while preparing a report.
It also highlighted that preparing a bearish report without disclosing participation can be charged with securities fraud by the US Securities and Exchange Commission (SEC).
Though it is common for short sellers to borrow a security, sell it on the open market, and later repurchase it at a lower price following adverse reports about companies, the involvement of hedge funds raises concerns.
Such funds may place parallel bets that amplify downward pressure on stock prices.
Anderson, Anson, and Kassam are yet to issue any statement on the matter.
The portal, quoted by PTI, said, “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 ‘more’. From what we can see in the dozens of exchanges, he had no editorial control. He was being told what to publish,” the portal claimed.
In addition, the Market Frauds portal also shared screenshots of some email interactions between Hindenburg and Anson to support its charge. It claimed to have accessed these screenshots through the documents available with the Ontario court.
“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,” the portal said.
“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,” it added.
The report added that Hindenburg Research received “hundreds of leads each year from diverse sources,” such as industry experts, whistleblowers and other investors when the association first emerged.
“We rigorously vet each lead and have always maintained full editorial independence over our work.
The portal highlighted one such report published by Hindenburg Research about Facedrive, a Canadian company that went public through a reverse merger as an eco-friendly ride-sharing service. The short seller claimed that the company was overvalued and lavishly paid promoters.
According to the portal, Anson allegedly exchanged emails with Anderson about the report and added that court documents revealed that the hedge fund knew when the report was to be published.
Just last week, Anderson announced that Hindenburg Research would be shut down. The company was spotlighted in India after publishing a scathing report about billionaire Gautam Adani’s conglomerate, the Adani Group.
Anderson shared a detailed post, stating that the research firm’s work is complete and it is time to move on.
“As I’ve shared with family, friends and our team since late last year, I have decided to disband Hindenburg Research,” he said in a blog post.
