New Delhi:
Lawyer Jai Anant Dehadrai launched an attack on Hindenburg Research chief Nate Anderson after reports said the US short seller is under scrutiny for securities fraud.
In documents filed at the Ontario Superior Court of Justice in a defamation suit, the head of Canada’s Anson hedge fund, Moez Kassam, said his firm shared research “with a wide variety of sources” including Nate Anderson.
The Market Frauds portal said court documents allegedly showed Hindenburg colluded with Anson while preparing a report.
While short sellers borrow a 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.
Reacting to the development, Mr Dehadrai, a noted white-collar criminal law practitioner, said in a post on X, “Big News. Nate Anderson, founder of Hindenburg Research, is now under scrutiny for securities fraud for sharing non-public information with hedge funds before releasing his firm’s reports. Court documents from Canada suggest that Anderson conspired with Canada’s Anson Funds, providing them with early drafts of Hindenburg’s reports.”
“This practice absolutely amounts to market manipulation and insider trading, as it would have allowed hedge funds to profit from anticipated stock movements triggered by Hindenburg’s reports. Shocking revelations in emails between Anderson and Anson Funds . Question is, who profited from their fake report on Adani Stock in India?” the lawyer said.
Big News.
Nate Anderson, founder of Hindenburg Research, is now under scrutiny for securities fraud for sharing non-public information with hedge funds before releasing his firm’s reports.
Court documents from Canada suggest that Anderson conspired with Canada’s Anson Funds,… pic.twitter.com/XkMhMc3cyc
— Jai Anant Dehadrai (@jai_a_dehadrai) January 19, 2025
Mr Anderson – days before Donald Trump’s presidential inauguration – announced he would shut down Hindenburg. This led to speculation especially in India that he wanted to avoid a possible India and US investigation into Hindenburg, whose report targeted the Adani Group and led to huge losses for investors.
The Adani Group refuted all the allegations by Hindenburg, and eventually the group firms recovered and reached new heights in the markets, proving they have the trust of investors.
In the latest development linked to Mr Anderson, if it can be proven that the bearish reports were prepared without disclosure of participation, it can be charged as securities fraud by the US Securities and Exchange Commission (SEC).
“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 Market Frauds portal reported.
It 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.
Mr Dehadrai also shared the same screenshot.
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 over valued and lavishly paying promoters.
Anson allegedly exchanged emails with Mr 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.
With inputs from PTI
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
