Two previous pieces on Left and Anson you must read:
https://marketfrauds.to/andrew-left-anson-funds/
https://marketfrauds.to/anson-funds-and-andrew-left/
The alliance is dead. Andrew Left has turned on Moez Kassam, accusing his old trading partner of lying to U.S. regulators to cover his own tracks.
But Moez isn’t worried. His response over the weekend (leaked by our sources) to Left’s lawsuit was that the SEC and DoJ would never admit they were lied to and manipulated into suing the wrong person. As political institutions, they cannot afford to be publicly fooled. (We understand that Kassam was under the influence of alcohol during the time of his statement, but the overriding sentiment was that Kassam is not at all concerned about Left’s lawsuit.)
His statement also appears to reflect advice from his legal team, which our sources say continue to ensure Kassam of the solidity of their position, even as the Anson Funds mastermind has received a sealed indictment.
But Moez Kassam should be worried. He has made the SEC and DoJ look incapable. He has wasted their time through lies and false/fabricated evidence. And once this is proven, any deal he had in place with either agency is off the table and they will throw the book at him.
We have a feeling (a very strong feeling) that Left has all the documents, emails, texts, recorded calls that he needs to bury Anson Funds for good.
Bloomberg did a superb piece on Left’s lawsuit here, which is behind a paywall. If you don’t have access you can read the full article here on Financial Post.
You can access the lawsuit though the following link, though we caution that much of the most damning material has been redacted. https://www.courtlistener.com/docket/71821716/2/left-v-anson-funds-management-lp/
The article presents some strong points. But what all Namaste shareholders should be looking at is this paragraph:
Left in his lawsuit alleges Anson didn’t want to pay him directly because at the time of the negative report, Anson was involved in a “bought deal offering” for Namaste and would be taking a long position on the stock. “Defendants therefore did not want to make it appear that they paid a short seller to drive the price down so that the financing would be more favorable for them, while they profited off the price dip on a short position,” Left said in the lawsuit.
Not only is this illegal, but anyone who lost money at the time in Namaste has grounds to sue Anson, as well as the company. A class action lawsuit should be in the making.
Here are a few things of note from the lawsuit that help explain the type of company Anson Funds is.
Balance Sheet Arrangement
Moez Kassam, a friend of Left and the Co-Founder, Chairman, and Chief Investment Officer of the hedge fund Anson—a fund that has a Toronto branch licensed to trade equities in Canada offered to short the stock on Citron’s. and by extension Left’s, behalf. Kassam, on behalf of Anson, agreed to distribute profits to Plaintiffs if the trade was successful: if the trade was unsuccessful, Plaintiffs would be responsible for any losses.
This balance sheet arrangement is well known to us.
In one of the files from the ongoing lawsuit in Canada, there is the following statement from Anson: https://marketfrauds.to/lawsuitfiles/t/t13.pdf – Page 336:
In particular, over a series of oral discussions, and WhatsApp messages exchanged by Mr. Kassam and Robert Doxtator, produced in this action, Anson agreed that it would pay Mr. Doxtator 15% of profits it made on any trades it executed on the basis of research/diligence provided by Mr. Doxtator, with Anson retaining complete discretion as to (a) whether to trade on the research/diligence provided; and (b) the financial terms of the trade
Marc Cohodes also commented on this balance sheet arrangement:
https://marketfrauds.to/anson-funds-and-hindenburg-research-commit-securities-fraud/
As reflected in email/WhatsApp exchanges dated July 23-25, 2019 produced in this action (see e.g. AAI00010372 and AAI00005519), Anson paid Mr. Doxtator $30,000 for his research/diligence on CannTrust. – If you haven’t already, it is imperative that you see what Moez Kassam did to Canntrust: https://marketfrauds.to/lawsuitfiles-canntrust-manipulation-left-hindenburg-relationship/ (this is an actual conversation he had)
Pure fraud and manipulation (where are you DOJ)
Anson cared about how its payments to Left were reported for two main reasons. First, Anson managed money for outside investors and earned profits for those investors by shorting company stock and buying it back at a lower price. Paying a third party for the successful short of stock (in this case Namaste stock) would have made it appear to Anson’s investors that it was improperly diverting monies away from the investors to a third party.
Second. and perhaps more important, Anson had significant conflicts of interest that it did not disclose to either its investors or, at the time. regulators. In addition to shorting Namaste stock and covering that short at a profit, Anson was also which meant that it stood to benefit if the Namaste stock price decreased. The lower the stock price,
Anson thus did not want to appear to have coordinated with a short seller to drive does the price of Namaste so that Accordingly, Anson’s executives, including Kassam and Puri, devised a scheme to mask its relationship with Plaintiffs. Anson directed Plaintiffs’ profits from the shorted Namaste shares to be paid directly to Falcon Research, a third-party research provider run by Kurt Feshbach. To justify the payments of more than $l million to Falcon Research, Anson created a series of false invoices that made it appear like Anson was (appropriately) paying for research services, when, in fact, Anson was using Feshbach’s company to funnel trading proceeds to Plaintiffs.
Once the monies were received by Feshbach, Feshbach paid the funds to Citron and ultimately Left. In short, rather than account for the money as trading proceeds paid directly to Citron. Anson disguised the funds as research payments to Falcon to mask its involvement in injecting negative information about Namaste into the market for its own benefit. To be clear. the decision to funnel payments through Falcon and to disguise the payments as payments for research was the decision of Anson, and Anson alone.
Anson lied about the invoices, claiming that Left requested to be paid this way. They got in first and made the deal with the regulators before Left (that’s how it works).
The problem for Anson is that this lie will soon be exposed. Moez Kassam’s arrogant belief that the SEC will let it go because they don’t want to be embarrassed is a dream. We believe Left has all the documentation needed to give the DoJ/SEC the proof they are looking for to lock Kassam and Puri up for purjery, in addition to wire fraud. And there will be NO DEALS. NO COUNTRY CLUB. Just hard time.
As part of Left’s collaboration with Anson and Anson’s agreement to short Namaste’s stock for him, Defendants asked Left to publish his research on Namaste’s fraud through Citron on the Citron Research website and Twitter.
Left had no problem doing so. He routinely published. through Citron, research reports and social media reports on frauds he had uncovered. Left only published what he believed to be truthful information or opinions, and has never been successfully sued by any company for defamation.
Left almost always wrote his own research reports, but Defendants wanted him to include some of their own research and wording in his publications. He acquiesced, provided they verified the languaee’s accuracy.
Defendants were so eager to expose Namaste that they provided Left with a lengthy draft research report at 8:2fi a.m. on September 12, 2018, the morning after they had agreed to short the stock for him.
After editing the report and verifying its accuracy, on September 13, 2018, Left published the report on Citron’s website and Twitter, and later also created the website.
We have seen this before with Nate Anderson. The reports Anderson and Left publish are not written and researched by them. They are publishing Anson material and putting their names on it.
To see how this is really done look at this piece:
Picture Proof of Anson Funds Corrupt Relationship with Hindenburg Research
You can also find out more about their partnership on this trade here:
Damning Court Documents of Anson Funds and Hindenburg Research Partnership
Plaintiffs and Anson were successful in their short strategy, earning a profit of nearly $5 million. Plaintiffs’ profit from the shares that Anson had agreed to short on their behalf amounted to approximately $840 000.
And that is precisely what they did. Kassam and Puri devised to leverage the exposure of Namaste as a fraud to pressure the bought deal’s underwriter, Eight Capital, LP (“Eight Capital”), to either cancel the deal or give Anson a discount on the stock. The former would plunge the stock price even further, in which case Anson could cover its short position for a higher profit: the latter would allow Anson to take a long position at a steep discount.
On September 26. 2018, Kassam texted Puri and Left that “Namaste bought deal may be even better now.” because Kassam“knows the lead order” and “they will force a reprice or tell 8 Capital they are walking.”
On September 30, 2018, Puri sent Left a draft follow-up report on Namaste. This new report from Defendants included language “recommending investors that bought the $3/share financing to rethink their purchase”—referring to the original pricing on the bought deal financing.
We would say Namaste shareholders have a slam dunk lawsuit here.
On October 28. 2018, Left texted Puri that he “might take down the namaste website” (namastemith.com). Puri asked him not to until “after close” (i.e.. after Anson closed the bought deal flnancing at a discounted price).
The above is just another day at the office for Anson. To the rest of us, it’s appalling, and regulators should be on it. Especially as Anson wrote the report, tried to conceal their involvement, and lied about the payments.
As with Nate Anderson, they are trying to position Andrew Left as the bigger name here, but it’s Anson pulling everyone’s strings. Why is it that everyone else can see this except the regulators. Are they being willfully blind?
More coming soon.
Who did the namaste deal
who were the bankers involved