US Short Seller Nate Anderson Announces Closure of Hindenburg Amid Allegations of Collusion with Hedge Funds

Nate Anderson, the founder of Hindenburg Research, has announced the closure of his eight-year-old short-selling firm amidst allegations of collaboration with hedge funds to produce bearish reports targeting companies, a Canadian news portal reported.

Court documents filed in a defamation lawsuit at the Ontario Superior Court of Justice have raised questions about Anderson’s alleged links with Canada-based Anson Funds. Moez Kassam, head of Anson Funds, admitted that his firm shared research with various sources, including Hindenburg.

The Market Frauds portal claimed the court filings revealed email exchanges between Anderson and Anson Funds, suggesting that Hindenburg lacked editorial independence. "Anderson was working directly with Anson, publishing reports as instructed, including price targets and content details," the portal stated, citing screenshots of email interactions included in the court documents.

Potential Securities Fraud Allegations

The involvement of hedge funds in drafting short-selling reports raises legal concerns, as such activities could be deemed securities fraud by the U.S. Securities and Exchange Commission (SEC). Short sellers profit by borrowing and selling securities with the expectation of repurchasing them at a lower price after their reports negatively impact stock value. Parallel bets by hedge funds could exacerbate the pressure on stock prices.

Anson Funds and Moez Kassam did not respond to requests for comment, nor did Anderson.

Market Frauds asserted that the ongoing review of court documents might lead to charges against Anderson for securities fraud. "From the available material, it is almost certain that Anderson will face SEC charges in 2025," the portal claimed.

Past Controversies and Hindenburg’s Shutdown

Hindenburg Research gained international attention in 2023 after publishing reports about India’s Adani Group, which refuted the allegations. The firm also targeted Canada’s Facedrive in 2020, criticizing it as overvalued and accusing it of excessive promotional spending. According to court documents, Anson Funds had prior knowledge of the publication of that report.

In June 2024, Anson Funds paid $2.25 million to settle SEC claims related to undisclosed payments to publishers of bearish research, without admitting or denying wrongdoing.

Last week, Anderson announced Hindenburg's closure, citing a desire to focus on personal life. "Nearly 100 individuals have faced charges because of our work. We shook empires that needed shaking," he said.

The announcement comes amid intensifying scrutiny over the firm’s operations and its alleged connections with hedge funds, leaving a legacy both lauded and controversial.