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.)

New Delhi:

Senior lawyer Mahesh Jethmalani has punctured US short seller Hindenburg Research’s chief Nate Anderson over his announcement that he would wind up the firm. Mr Anderson said the work took a toll on him as it was “rather intense and at times all-encompassing”.

Hindenburg targeted the Adani Group in a case that is now seen as an attack on the ‘India Story’.

“Frankly speaking, I don’t know how old Mr Anderson is, but the fact of the matter is that he’s not had some sterling results. His claim to fame really rests on the Adani hit job, which he was part of. I don’t think he’s done other serious work or businesses of note. So, he is essentially a research analyst,” Mr Jethmalani told NDTV.

One of the reasons for winding up Hindenburg, Mr Anderson said, was it completed the projects it was handling. The announcement comes just days before President-elect Donald Trump’s inauguration event. There is speculation Hindenburg is disbanding to avoid a possible India-US joint investigation.

“I really don’t know his exact line of business. He is a research analyst who provides reports to people, or he is hired by people who need to bear-hammer a few shares for profiteering. In this case, of course, he became a little larger than life because he took on one of the biggest industries in India, which for a couple of days caused serious economic turbulence in the country,” Mr Jethmalani said.

Mr Anderson’s allegations led to panic among investors and wiped out more than $150 billion in the value of the Adani Group shares at their lowest point. A lot of that was money from small-time investors, men and women who put in their hard-earned savings. And now Mr Anderson says ‘I am off, I am done.’

How does one ensure accountability?

“As far as India is concerned, SEBI is on the job. The problem is that this man doesn’t live in India. He is presumably a US national. Now, if he is a US national, all the best we can do is seek the cooperation of the government. But the last government, the ‘Democratic deep state’ as we call it, were hand in glove with this man through the [George] Soros connection,” Mr Jethmalani told NDTV, referring to an investigation by the capital markets regulator Securities and Exchange Board of India (SEBI).

“Soros is the biggest financial contributor to the coffers of the Democratic party and has an overwhelming say in their policies, particularly the economic policies. Now, Soros is known for his anti-India and particularly anti-PM Modi government stand. So, there is not much you can do except now hope that – and I suspect – that the Trump administration may already have started some kind of a probe which led to this man winding up his company,” the senior lawyer said.

“Having said that, whatever aid we can get from the Trump administration, which will be a lot more friendlier to the Indian government on this issue as well, we should undoubtedly invoke that help, and see that this man is brought to justice along with all the others whom he connived with,” Mr Jethmalani added.

Earlier today, another senior lawyer, Mukul Rohatgi, described Hindenburg as a “dubious organisation”. Mr Rohatgi, who is also the former Attorney General for India, told NDTV Hindenburg had been constantly attacking the Indian economy and a company, shaking the confidence of the Indian markets and “affecting the investments of millions of people.”

“Look, I don’t think anybody could accept or, you know, find out anything more about a dubious organisation, an organisation which says that they are short sellers. They say that they are out to create havoc in share markets… And I think they have realised that it is a shoot and scoot policy,” Mr Rohatgi told NDTV.

“And therefore, they want to just close down because they don’t want to face any investigation, either in India or the US or any other jurisdiction. And maybe they fear that when President Trump takes over, he may look into the complaints filed by Indian bodies and industrial houses or Indian government entities,” the senior lawyer said. “Therefore, the idea is to shut shop and run away.”

He said Hindenburg will have to face investigation somehow.

“The people who are behind this dubious organisation, they will certainly be liable and they can certainly be tracked down wherever they are. And they must face the heat and face the action,” Mr Rohatgi said.

The matter had turned political with the Congress and other Opposition parties seeking a joint parliamentary committee (JPC) probe into the Hindenburg report, despite India’s institutions and the Supreme Court completely dismissing Hindenburg’s “findings”.

Adani Group Chairman Gautam Adani at the annual general meeting in June said the group “faced baseless accusations made by a foreign short seller that questioned our decades of hard work.”

“In the face of an unprecedented attack on our integrity and reputation, we fought back and proved that no challenge could weaken the foundations on which your Group has been established,” he said.

Hindenburg Research, the US-based short seller that had targeted several business entities including the Adani Group, is going to be disbanded, founder Nate Anderson has said.

“I have made the decision to disband Hindenburg Research. The plan has been to wind up after we finished the pipeline of ideas we were working on,” he said in a note on the Hindenburg website.

In an announcement that comes days before Donald Trump takes office, Anderson has also clarified there has been no particular threat or personal issue behind this decision to wind up.

Hindenburg targeted the Adani Group in 2022 with what the group said was “nothing but a lie” and were “calculated attacks on India”. The Supreme Court, too, had given a clean chit to the Adani Group with analysts and experts calling out the 

In August 2024, the short-seller launched another attack on the energy-to ports conglomerate, which snubbed the charges as “recycled claims” that had earlier been discarded.

Speaking about the short seller hit jobs a month later, Gautam Adani, the chairman of Adani Group, had said it taught him the “most profound lesson”.

“Our leadership spirit was never more visible than during the financial market attack in January last year. It was a short-selling attack initiated from abroad. This was not a typical financial strike. It was a dual assault targeting our financial stability and pulling us into a political storm. It was a calculated move,” he had said.

The short seller had also targeted Indian markets regulator chief Madhavi Puri Buch and her husband in the past, who had called it an “attempt at character assassination”.

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)