Hindenburg’s Nate Anderson Under Scrutiny For Alleged Links With Hedge Fund In Targeting Companies

Nate Anderson, the activist short-seller behind the now-closed Hindenburg Research, is under scrutiny for his alleged collaboration with hedge funds while preparing reports that targeted specific companies, according to documents filed in a defamation lawsuit in Ontario. The controversy centers around claims that Anderson’s firm worked closely with Anson Funds, a Canadian hedge fund led by Moez Kassam, to publish bearish reports on companies.

Court filings submitted to the Ontario Superior Court of Justice suggest that Anderson’s Hindenburg Research may have shared research and collaborated with Anson Funds in the preparation of critical reports. Moez Kassam, head of Anson Funds, stated in the documents that his firm had provided research to a variety of sources, including Hindenburg. The Canadian portal Market Frauds reported that the filings allegedly reveal a coordinated effort between Anson and Hindenburg to publish damaging reports, potentially leading to securities fraud charges by the US Securities and Exchange Commission (SEC).

Short-Selling And Hedge Fund Involvement Raises Concerns

Short sellers like Anderson borrow stocks to sell them on the open market, expecting to repurchase them at a lower price after a negative report causes the stock to fall. However, the involvement of hedge funds raises concerns because they could place parallel bets, amplifying the downward pressure on stock prices. These actions can lead to legal ramifications, particularly if the collaboration not disclose.

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The Market Frauds portal claims that email exchanges between Anderson and Anson’s team show that Anderson had little editorial control over the reports he published. According to the portal, Anderson followed instructions from Anson, including specific price targets and the content of the reports. The website claims to have accessed these email interactions through court documents and asserts that both Anson Funds and Anderson may face multiple counts of securities fraud.

The portal stated, “Based on what we have read so far, it is almost certain that when the full exchange between Hindenburg and Anson reaches the SEC, Nate Anderson will be charged with securities fraud in 2025,” adding that they have only reviewed a fraction of the documents.

Hindenburg’s Past And Response To Allegations

In response to the allegations, Hindenburg had previously stated that it receives numerous leads from sources such as industry experts, whistleblowers, and investors. The firm emphasized that it rigorously vets each lead and maintains editorial independence over its research. In 2020, Hindenburg gain attention for publishing a report on Facedrive, a Canadian ride-sharing company, accusing it of overvalue and mismanaging funds. Court documents suggest that Anson was aware of the timing of the report’s publication.

These revelations follow a separate investigation by the US Justice Department and the SEC into Anson Funds. In June, Anson Funds Management and Anson Advisors Inc agreed to pay $2.25 million to settle SEC claims for failing to disclose payments to publishers of negative research. The settlement reach without admitting or denying any wrongdoing.

Hindenburg’s Closure Amid Ongoing Controversies

Last week, Nate Anderson announced the closure of Hindenburg Research, which became internationally known in 2023 for publishing explosive reports on billionaire Gautam Adani’s conglomerate, leading to political controversies and significant financial losses for the company. Anderson did not provide a specific reason for shutting down the firm but expressed a desire to spend more time with family and friends.

“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,” Anderson wrote in his announcement.

As the legal scrutiny continues, Anderson and his firm face mounting questions about their practices and the potential consequences of their research partnerships with hedge funds.