NEW YORK: Nate Anderson, the controversial short-seller behind Hindenburg Research, finds himself under scrutiny after court documents allegedly revealed his collaboration with Canada’s Anson Funds in preparing bearish reports targeting companies, raising serious ethical and legal questions.
According to the Market Frauds portal, filings submitted to the Ontario Superior Court of Justice in a complex defamation case suggest that Anderson worked closely with Moez Kassam, head of Anson Funds. Kassam admitted in court that his firm shared research with “a wide variety of sources,” including Anderson.
Unveiling alleged collusion
Documents reportedly show Anderson frequently sought input from Anson Funds on report content, price targets, and timing. Screenshots of email exchanges, shared by Market Frauds, suggest Anderson lacked editorial independence and followed directives from Anson, sparking allegations of securities fraud.
Such undisclosed coordination between hedge funds and short-sellers can lead to amplified downward pressure on stock prices, with both parties benefiting financially. These actions, if proven, could result in charges of securities fraud by the US Securities and Exchange Commission (SEC).
Adani controversy
Hindenburg Research made global headlines in early 2023 with its explosive report on the Adani Group, alleging stock manipulation and accounting fraud at the conglomerate led by billionaire Gautam Adani.
The report caused a massive sell-off in Adani stocks, erasing billions in market value and triggering political and economic fallout in India. The controversy sparked debates on corporate governance and regulatory oversight in emerging markets, with Hindenburg’s tactics drawing both praise and criticism.
Impact of Hindenburg’s reports
This isn’t the first time Hindenburg’s reports have caused upheaval. In 2020, its investigation into NMC Health, an Abu Dhabi-based hospital chain listed in London, exposed billions of dollars in hidden debt and questionable financial practices.
The report led to the collapse of NMC Health, forcing it into administration and wiping out billions in investor wealth.
Hindenburg’s exposé on NMC Health sent shockwaves through the financial world, underscoring the firm’s ability to reshape market narratives. However, allegations of collusion and editorial manipulation now cast doubt on its integrity
SEC and Justice Department probes
The allegations come amid broader investigations into Anson Funds and its practices. In June, Anson settled SEC claims by paying $2.25 million without admitting wrongdoing, over accusations of failing to disclose payments to external publishers of bearish reports.
The controversy also casts a shadow over Hindenburg’s explosive history, including its 2023 report targeting Gautam Adani’s conglomerate, which triggered global headlines and major market losses.
Anderson’s sudden exit
Anderson recently announced the closure of Hindenburg Research, citing a desire to spend more time with family and friends. However, the timing of his decision has fueled speculation, with Market Frauds predicting that Anderson could face securities fraud charges in 2025 as investigations progress.
The unfolding scandal marks a dramatic turn for the once-feared short-seller, whose work had often reshaped market narratives.
