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Yes, Hindenburg Research is under investigation. But, this is not that simple. Basically, short selling is an investment in a manner, if the value of the stock falls, then the investor will make money. That sounds almost illegal. A petition was filed in the Supreme Court of India, to make short-selling illegal, according to LiveLaw.
According to Forbes, Hindenburg Research is part of numerous short-sellers who are being investigated for ‘probing potentially illegal trading tactics’. Although, the same article clarifies that these are investigations. Hence, no party has been either accused or is facing charges. The US Department of Justice is probing 30-odd short-sell investment and research firms for years now. So, there is no particular targeted investigation going on.
Read more: DOJ Investigates Short-Sellers For Potential Trading Abuses Including ‘Spoofing’ And ‘Scalping’
According to the Wall Street Journal, there have been previous cases of fraud in short-selling. Hence, the investigation is to ensure they are not being repeated to make more profits.
Also, Hindenburg is accused of being a ‘Ponzi hunter’. A Ponzi scheme is basically a fraud, where the person swindles money by luring new investors in the guise of making more-quick money. And, Hindenburg's research has helped get some people to the FBI, who were involved in such Ponzi schemes.
Read more: Short seller's Ponzi scheme tip spurs Las Vegas FBI raid, gunfire
Recent developments
There is a full-blown attack on the credibility of the organization which conducted the investigation. Indian businessman Anand Mahindra has come out in support of the economic growth of India. In addition, the Finance Minister of India Nirmala Sitharaman has made no specific comments on the reports and has left them to the concerned authorities. SEBI report on the matter is pending. While one of the committees at SEBI has Gautam Adani’s son’s father-in-law as a member.
Why the name ‘Hindenburg’?
In 1937, the United States witnessed a tragic airship accident. A German ship, LZ 129 Hindenburg, was flying from Frankfurt, and the ship caught fire. There were at least 30 fatalities. The reason behind the ignition is still unknown. Although, the organization mentioned in this article says that the Hindenburg disaster was a man-made crisis. Hence, they want to take responsibility for the exposing fraud of the corporations.
In the case of the Adani Group report, the Hindenburg research said, the Group has ‘draped itself in the Indian flag while systematically looting the nation.’
A similar reference to the Hindenburg disaster is in Netflix’s latest Glass Onion: A Knives Out mystery.
Read More
- Who is Cyril Shroff, Adani’s father-in-law, part of SEBI?
- Gautam Adani slips out of list of world’s top 10 richest people
- What is short selling that erased $65 billion of Adani group in three days?
- Hindenburg reply to Adani: What has happened so far?
- Know all about Shah Dhandharia & Co, CA firm which audits Adani group
- What is Hindenburg research, and is the CIA behind it?
- Who is Nathan Anderson, person behind Adani’s Hindenburg report?
- Who is Chang Chung-Ling and, does Adani have a Chinese connection?
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