EW YORK (AP) -. Hindenburg Research, the financial research firm with an explosive name and. A track record of undermining the stock prices of its targets, is taking on one of the world’s richest men.
Hindenburg was back in the headlines last week after Indian conglomerate . Adani Group was accused of “a brazen stock manipulation and accounting fraud scheme”. It cited two years of research. Including discussions with former Adani senior executives and . A review of thousands of documents.
The Adani Group blasted. The allegations, calling them a “malicious concoction of selective. Misinformation and stale, baseless and discredited allegations.
Index. Here’s a look at the firm behind all the movement:
Hindenburg says it specializes in “forensic financial research”. In layman’s terms, it looks for corruption. Or fraud in the business world, such as accounting irregularities . And bad actors in management.
Where does its name come from?
The agency said it saw the . Hindenburg, the plane that caught fire in the 1930s and screamed . Oh, humanity” as “a symbol of an man-made, avoidable disaster.” It says it looks for similar crashes in financial markets . Before they lure more unsuspecting victims.”
Who else went after the Hindenburg?
It’s most famous for its 2020 report. Nicola, an electric-vehicle industry conglomerate whose founder . Hindenburg said made misleading claims to . Partner with top auto companies hungry to catch Tesla.
In his complaint, Hindenburg accused . Nikola of staging a video to calm suspicions about his truck. Which showed the vehicle cruising down a road. Hindenburg said the video actually shows the truck rolling over after being pulled up a hill.
For Nicola, quick validation from government and investors.
The company and its founder, Trevor Milton, received grand jury subpoenas from the . US Attorney’s Office for the Southern District of New York and .
October of defrauding investors by making exaggerated claims about . His company’s progress in developing zero-emission 18-wheel trucks fueled by electricity or hydrogen.
And Nicola agreed to pay $125 million in late 2021 to settle SEC charges that it defrauded investors by . Misleading them about its products, technological advances and commercial potential.
What did the Hindenburg gain from this?
It can make money. In its Adani report, it says it has “a small position in Adani group companies. Through bonds that trade in the US and other investments that trade outside India.
It has made similar “short” bets against other companies. That have published unflattering reports on it. A “short” trade is a way for someone to make money if an investment goes down in value.
Such short sellers have been criticized for depressing stock prices with unfounded allegations. But supporters also call them a healthy part of the stock market. Keeping stock prices in check and preventing them from moving too high.
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