Hindenburg Research Under Scrutiny for Alleged Hedge Fund Collusion

Nate Anderson, the short-seller known for shutting down the research firm Hindenburg, is now in the spotlight for alleged connections with hedge funds in crafting reports aimed at specific companies. This revelation comes from documents presented in a complex defamation lawsuit at the Ontario Superior Court of Justice.

Moez Kassam, head of Canada’s Anson hedge fund, disclosed in court filings that his firm has shared research with a wide variety of sources, including Hindenburg’s Anderson. The Market Frauds portal highlighted that these documents suggest a collaboration between Hindenburg and Anson in preparing a report. Such activities, if conducted without proper disclosure, could potentially be classified as securities fraud by the US SEC.

Short selling involves borrowing a security, selling it on the open market, and aiming to buy it back at a lower price after the company's stock is negatively impacted by a damning report. The involvement of hedge funds in these practices raises concerns, as they might also place parallel bets, further pressuring stock prices downward.

Attempts to reach Anson and Kassam for comments were unsuccessful, and an email sent to Anderson has not been answered.