Nate Anderson, the ‘activist’ short-seller behind Hindenburg Research, is facing scrutiny after documents filed in a defamation lawsuit suggested he may have collaborated with hedge funds in preparing reports that target companies. Anderson, who recently announced the closure of his nearly eight-year-old research firm, is alleged to have shared research with hedge funds, including Anson Funds, headed by Moez Kassam.
According to a report from the Market Frauds portal, court filings from the Ontario Superior Court of Justice revealed that Kassam’s firm shared research with a variety of sources, including Hindenburg Research.
The documents are said to indicate that Hindenburg worked closely with Anson while preparing a bearish report, which could potentially lead to charges of securities fraud by the US Securities and Exchange Commission (SEC) if it is confirmed that the collaboration was not disclosed.
Short-sellers like Anderson typically borrow securities to sell them on the market, hoping to repurchase them later at a lower price after their reports drive the company’s stock down. The involvement of hedge funds in this process has raised concerns, as they could place parallel bets on the stocks, intensifying the downward pressure on prices.
Though Anson and Kassam could not be reached for comment, an email sent to Anderson went unanswered.
The Market Frauds portal claimed to have access to email exchanges between Anderson and Anson Funds, asserting that Anderson acted under the direction of Anson, publishing reports based on their instructions, with little editorial control. “He was being told what to publish,” the website said, citing the documents.
The portal also claimed to have discovered multiple counts of securities fraud related to both Anson Funds and Anderson. According to the website, only 5 per cent of the court documents have been reviewed so far, but they predict that Anderson will face charges of securities fraud in 2025 once the full scope of the exchanges reaches the SEC.
Hindenburg Research, in response to the allegations, previously stated that it receives “hundreds of leads each year from diverse sources” and insists on rigorous vetting of all information. Anderson’s firm has always maintained editorial independence over its reports, the company said.
The alleged association between Hindenburg and Anson dates back to 2020 when Hindenburg published a report on Facedrive, a Canadian eco-friendly ride-sharing company. The report criticised the company’s valuation and lavish promoter payments, and court filings show that Anson was aware of the report’s timing and publication.
The ongoing legal proceedings follow a separate investigation by the US Justice Department and the SEC. In June 2024, Anson Funds settled SEC claims by agreeing to pay USD 2.25 million without admitting any wrongdoing, after failing to disclose payments to publishers of bearish research.
Last week, Anderson announced the closure of Hindenburg Research, a decision he attributed to a desire to spend more time with family and friends. Hindenburg gained global attention in 2023 for its reports about the Adani Group, which sparked political controversy and significant financial losses.
In his statement, Anderson reflected on the impact of his work, noting that nearly 100 individuals, including billionaires, had been charged due to his research.
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