Illegal profit
The SEC accused Left of using Citron Research’s website and social media to recommend long and short positions in 23 companies, causing stock prices to fluctuate by an average of 12%. Left and Citron made false statements about the companies and their positions in stock prices, thereby benefiting from the outcome and making illegal profits. The investigation also found that Left resold The information obtained from distorted stock research is passed on to third parties, including hedge funds, before being published on the website and social networks, allowing them to make money from market manipulation.
There will be Citron in April 2023 accused Control and manipulation of the shares of Özgürlük Holding A.Ş. are weak. Citron tried to influence the movements of the holding’s securities in this way (its securities have been traded on the American NASDAQ exchange under the ticker FRHC since 2019). Short sellers trying to make money from the decline in Özgürlü Holding’s shares were unable to make any significant changes in quotes.
These accusations turned out to be false and were easily denied by both investors and Wall Street experts. However, the issue was also “revisited” by other short sellers in the market – Hindenburg Research (formerly HF Foods, Block Inc. and the business of Indian billionaire Gautam Adani) in the summer of that year continued the attack Similar accusations were made against Freedom Holding, adding allegations of manipulation of reporting and control of a Russian company whose assets were previously sold from the holding.
John Minchillo/AP
Freedom Holding denied all the accusations and said that they were speculations and unconfirmed facts. The founder and CEO of the holding, Timur Turlov, said on the same day report examined all the allegations openly and thoroughly, showing their inconsistencies. The company’s then-newly released annual report already included a clean audit report from Deloitte about a full audit of Freedom’s compliance procedures and finances.
Failed short attack
Shorts betting against FRHC faced a short squeeze and had to buy back shares to close out their positions. The holding’s securities rose by 25% in the days that followed, reaching their highest level in history (over $100). According to market experts, Hindenburg lost more than $20 million in this attempt to accidentally crash Freedom Holding’s securities.
Despite the failure of the short-selling attack, the holding management decided to conduct an additional independent audit to eliminate investors’ distrust.
This was for attractive experienced American law firms Forensic Risk Alliance and Morgan Lewis & Bockius LLP. They conducted a four-month audit, including a detailed study of the company’s financial documents and transactions, visits to key offices, interviews with employees, etc. The audit covered the holding’s activities in Kazakhstan, Cyprus and Belize.
The audit results showed that Hindenburg’s claims were unfounded. Independent auditors confirmed that Freedom’s business developed and grew organically, without financial manipulation or illegal actions against customers, and without violating sanctions regulations of the countries where the business was conducted. The holding company strictly complies with international sanctions and compliance procedures. The audit also revealed that Hindenburg researchers had a poor understanding of financial businesses such as Freedom as a whole. The report’s summary has been published Here.
Strengthening of positions
Timur Turlov founded Freedom Finance 15 years ago and moved the holding’s shares to the NASDAQ stock exchange almost five years ago. Now Freedom Holding Corp. is an international banking and financial group serving KazakhstanEurope and Asia, USA – only in 20 countries. Areas of interest include access to global stock exchanges, participation in initial public offerings (IPOs), banking services, insurance, online payments and much more. In particular, Freedom is actively developing an integrated system ecosystem It combines financial and non-financial services in Kazakhstan. The main focus is on researching customer needs and developing digital products (online lending and insurance, own digital currency, etc.).
Özgürlü Holding A.Ş.
Freedom Holding’s revenue reached $1.6 billion (+105% YoY) in the fiscal year ending March 31, 2024. By the end of July 2024, the company’s market value will be almost 5 billion dollarsTimur Turlov owns 70% of the holding.
One of the latest news regarding the development of the holding was: inclusion Kazakhstan has listed Freedom Holding Corp. shares on the Astana International Exchange (AIX). The official listing of (FRHC) allows investors to buy and sell these securities in US dollars and move freely between the Nasdaq Capital Market and AIX. This step strengthens the company’s position and contributes to the development of Kazakhstan’s investment potential.
Also, international organization S&P increased The forecasts for the ratings of companies in the Freedom ecosystem are at two levels at once – to “positive”. The changes affected brokers Freedom Finance JSC, Freedom Finance Europe, Freedom Finance Global and Freedom Bank. The ratings of all Freedom Holding Corp. were kept at “B-“, while the outlook was upgraded to “stable”. S&P forecasts Freedom to continue its strong earnings in 2024-2025.
The SEC’s lawsuit against Left and Citron, we add, is the result of a multiyear investigation launched in 2019 into the relationship between hedge funds and activist short sellers. The allegations include market manipulation and false statements about stock positions that harmed retail investors. The DOJ and SEC are also seeking the return of ill-gotten funds and a ban on Left from holding leadership positions.
What are you thinking?
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.