According to court documents filed in Ontario, Nate Anderson, the ‘activist’ short-seller behind Hindenburg Research, is under investigation for alleged collaboration with hedge funds in preparing reports targeting companies. The allegations surfaced as part of a complex defamation lawsuit involving Canada’s Anson hedge fund.
Documents submitted to the Ontario Superior Court of Justice reveal that Anson’s head, Moez Kassam, stated his firm shared research “with a wide variety of sources,” including Anderson’s Hindenburg Research. The filings suggest that Hindenburg may have worked with Anson on a report, raising concerns about potential securities fraud. If proven, such undisclosed coordination between short-sellers and hedge funds could lead to charges by the U.S. Securities and Exchange Commission (SEC).
Short-selling involves borrowing shares, selling them, and repurchasing them at a lower price after a stock decline, often triggered by negative reports. The involvement of hedge funds is particularly concerning, as they could place parallel bets, exacerbating downward pressure on stock prices.
The website Market Frauds, which reviewed the court documents, claimed that email exchanges between Anderson and Anson indicated that Hindenburg was effectively acting on Anson’s instructions. “Anderson had no editorial control and was being directed on what to publish,” the website alleged, sharing screenshots of purported email interactions to support its claims.
The documents also reference a 2020 Hindenburg report on Facedrive, a Canadian ride-sharing company, which accused the firm of being overvalued and excessively compensating promoters. Court filings suggest Anson had prior knowledge of the report’s release and communicated with Anderson about it.
These revelations come amid a separate investigation by the U.S. Justice Department and the SEC. In June, Anson Funds Management and Anson Advisors Inc. agreed to pay $2.25 million to settle SEC claims, without admitting wrongdoing, for failing to disclose payments to external publishers of negative research.
Last week, Anderson announced the closure of Hindenburg Research, which gained global attention in 2023 for its reports on billionaire Gautam Adani’s conglomerate. The reports triggered political controversies and significant financial losses. Anderson did not specify a reason for the shutdown but expressed a desire to spend more time with family and friends.
“Nearly 100 individuals have faced civil or criminal charges, in part due to our work, including billionaires and oligarchs,” Anderson wrote in his announcement. “We’ve shaken some empires that we believed needed shaking.”
Subscribe to our channels on Telegram, WhatsApp, and Instagram and get the best stories of the day delivered to you personally.