Our continuing private investigation has uncovered new information about how this illegal operation involving Genius Brands (GNUS) was conducted by Moez Kassam and Anson Funds. New emails have surfaced from an individual by the name of Josh Flo (a Minnesota real estate agent) in which he admits to the fraud he committed to manipulate the share price of Genius Brands
Our investigation also involves a source at a Canadian broker who reveals that Moez Kassam made close to $100 million profit from his fraudulent Genius Brands trade. Where he played both sides of the trade. Anson were responsible for the huge pump in the price and then the big dump that took place. We have published a new piece looking at the new lawsuit against Anson which is an important read for investors in Genius Brands: https://marketfrauds.to/augenbaum-v-anson-investments-master-fund-lp-et-al/
Background: How Moez Kassam and Anson Funds defrauded GNUS investors:
Anson Funds was the driving force behind the manipulative long-short campaign for entertainment company Genius Brands – GNUS.
A strategic plan was initiated by Anson Funds to make the stock price adhere to their long-short rule of “Elevator up, Stairs down” with the addition of a ‘safety net’. They would do all of this while giving GNUS and regulators the impression they were “long” the stock.
In early June 2020, out of the blue, social media pundits start calling Genius Brands the next Disney. But this wasn’t your typical short squeeze like everyone thought. This was Kassam setting up his manipulative Long-Short strategy by creating unsubstantiated rumors, according to our sources close to Anson. GNUS turned into the most popular stock added to Robinhood accounts during the first week of June. The move created the liquidity demographic required to cover Anson’s and other associated short sellers’ massive positions.
When GNUS stock was peaking above $8+ USD a share, many investors will recall that some anonymous pumpers on social media were speculating that Genius Brands cartoons would become more popular than Disney’s.
On June 5th, at the peak of the GNUS share price madness, Hindenburg Research (Nate Anderson) entered the picture on cue. Hindenburg is a prominent short seller, and according to a lawsuit filed by Catalyst Capital, it has a direct working relationship with Kassam’s Anson Funds.
Nate Anderson, of course, has denied the allegations, but we know from multiple sources that he is directly associated with Anson Funds. The pattern is clear to see without source confirmation: The days before the Hindenburg report on GNUS was published, significant short positions were taken by Anson Funds and/or its associates.
And to the outside world there is perfect cover: In his report entitled ‘A Bagholder’s Guide to Why We Think Genius Brands Will Be a $1.50 Stock Within a Month’, Nate Anderson argues that the GNUS-Disney social media postings included a bunch of falsehoods. He even suggested that investigators dig deeper into a situation that Moez Kassam manufactured in the first place. (It’s important to note that Nate was paid by Anson Funds for the report – something he did not disclose on this short report – another violation). It is unlikely he was paid directly – it would have been trough a third party as a consulting fee. The amount is believed to be in excess of $300,000 USD.
The timing of the release of the report was impeccable. It was also put together, complete with an ostensible investigation, in a matter of a few days. That sort of turnaround time, of course, is impossible, so it is clear that Nate Anderson was given vital facts of vetted information by an insider (in this case, Moez Kassam or one of his close associates, Sunny Puri). But there are more details of the Hindenburg report that are worth mentioning here. The report was premised on the knowledge that retail investors were completely oblivious to the fact that 131 million shares and share equivalents issued from GNUS’ recent financing rounds would become available to trade within an estimated 2-4 weeks. And Anson Funds directly and indirectly participated in these financing rounds or advised GNUS in these rounds.
On June 5th, at the peak of the GNUS share price madness, Hindenburg Research published a report entitled ‘A Bagholder’s Guide to Why We Think Genius Brands Will Be a $1.50 Stock Within a Month’, In the report they argued that the GNUS-Disney social media postings included a bunch of falsehoods. And focused heavily on the knowledge that retail investors were completely oblivious to the fact that 131 million shares and share equivalents issued from GNUS’ recent financing rounds would become available to trade within an estimated 2-4 weeks. And Anson Funds directly and indirectly participated in these financing rounds or advised GNUS in these rounds. (Please see this post to find out more on how Anson were even dishonest here: https://marketfrauds.to/augenbaum-v-anson-investments-master-fund-lp-et-al/ )
GNUS has generated losses every quarter for almost 10 straight years. Despite this, the self-proclaimed street savvy Anson Funds was GNUS’ biggest institutional investor and supporter for many years.
People also need to ask themselves why on the 4th June one day before the Hindenburg report came out, Andrew Left of Citron Research (a good friend of Moez’s and who has worked with Anson on multiple occasions to defraud investors and break companies) suddenly puts out a negative tweet on Genius Brands: https://twitter.com/citronresearch/status/1268535667811708928?s=21
Does this not seem strange to people when his best buddy was apparently long the stock and a big supporter of what they do?
After the Hindenburg report came out, GNUS stock plummeted, causing Moez to panic because he likes the stairs down approach as it allows him to disguise his actions much more cleanly.
To do this, his team and people linked to Anson created the www.DisneyGuide.com website with the sole purpose of pumping the GNUS stock to stop the slide and make it a more manageable descent.
Our investigation has uncovered that the owner of the DisneyGuide.com domain is a used car salesman and realtor from Minnesota by the name of Josh Flo.
While the authorities are already likely looking into Josh Flo, what they will find is this: An individual who has little understanding of markets or market rules. This individual does not appear to fully understand with whom he was working or the extent of the crime he was committing…
He was most likely simply an instrument used by Moez, and possibly someone whom he came into contact with through a close associate or during an Anson Funds visit to Minnesota when they cut a deal with a company called CNH.
They talked Flo into purchasing the domain and even convinced him to use his personal Twitter account which has since been closed down to talk up the fake Disney news. They also convinced him to register an account on Stocktwits to pump it further, along with another Twitter account registered to the DisneyGuide.com website.
(The Wayback Machine thankfully captured this fraud before Flo could delete his Twitter account. So we are still able to see his post history: https://web.archive.org/web/20201025231946/https://twitter.com/JoshFloRealtor )
Flo started posting on the new Twitter account on June 13th and then stopped on June 16th.
On his personal Twitter, Flo also suddenly shifted from Tweets strictly related to real estate to (last post in 2018) …. GNUS, with zero explanation.
On June 9th, Flo suddenly posts something about a random oil stock to make it look like he is now interested in equities; and then on June 11th, all attention shifts to GNUS.
On June 15th, he posted the following:
Is this legit? I just saw it.
https://disneyguide.com/f/is-disney-pursuing-genius-brands-we-are-hearing-rumors The link is still there but the contents have been cleaned up …
The entire social media back-and-forth has Josh Flo talking to himself and commenting on his own posts on different platforms.
Flo has not yet moved to delete his Twitter content, but we suspect that will follow soon when he realizes the amount of trouble he is in.
A Toronto-based source close to Anson Funds has told us that Josh Flo and the DisneyGuide.com website details are the one loose end that has Moez Kassam very concerned. Flo is intended to be the fall guy when the SEC comes knocking, but he is also the weakest link.
If Flo believes that Kassam will betray him as he has betrayed others, Flo may run to the authorities himself to avoid prosecution and turn himself into a whistleblower.
Then we also have Flo’s Stocktwits account. https://stocktwits.com/Oilguy2020 in which a used car salesman and real estate agent suddenly becomes an “Oil Guy”.
It is all the same copy that he posted on Twitter in June and then it mysteriously disappeared on June 26th. Fortunately, someone at ADVFN managed to copy the text: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=156225025
It is our assessment that Josh Flo—a low-level real estate agent—is not in a position to “hear rumors” of this level. He was fed this information and hired to publish it as a fall guy.
TheFly also covered this: https://thefly.com/landingPageNews.php?id=3109307&headline=GNUS;DIS-Disneyfocused-blog-circulates-Genius-Brands-rumor
When Josh Flo wrote this piece–https://disneyguide.com/f/is-disney-pursuing-genius-brands-we-are-hearing-rumors—GNUS stock suddenly halted its downward trajectory and moved from $3.45 to $4.52. It traded hundreds of millions of shares and has never been that high since. Then, on June 15th, after Josh managed to seed the forums and chat rooms, he pulled the piece off the website and since then it has been showing a “404 page” error.
The stock was in freefall, falling from $7.93 on the 3rd of June to $3.97 on the 9th June. Then on the 10th June Josh publishes his report and the downtrend immediately stops and reverses and closes the day at $4.51, trading 113,550,664 shares.
The next day, the stock falls a little but still trades 151,898,954 shares.
Then, on the 12th, it recovers to $4.16 with 95,905,448 shares traded.
The next day of trading is the 15th where Josh hits social media and pushes the report hard to people. The stock rallies to $4.52 and trades 118,788,498 shares. Josh then knows he has done his work and the rumors are out so he does the wise thing and pulls the report down (likely on instructions from Moez Kassam/Anson).
Please take into account the above numbers are very impressive as the average volume for GNUS is 30,000,000 shares a day.
Obviously, the media picks up on this and the stock starts falling. But what is important to note here is that this rumor stopped the downward movement, as it was not to Moez Kassam’s liking.
NOTE: readers must understand one thing. Reports alone do not send stocks into a nosedive on their own. They need help from the markets and this is where Anson Funds are very strong with their sophisticated trading techniques which include wash trading, layering, spoofing and other forms of manipulation normally using algorithms that are designed to create weakness in the company’s share price by manipulating the bid/ask. They use multiple brokerages and banks who are all in on the game. Through sheer brute force they move the stock lower and with the whole short and distort campaign in full swing the negative momentum causes panic amongst investors who just want to get out of the stock. That is when we see the share prices fall off the cliff. Hindenburg and Citron are all part of the wolfpack and partners with Anson Funds. Their co-ordinated attack works 9/10 times
But Josh didn’t stop there. Seeing the success of his handiwork a plan was put in place by Anson to do something else. This time it was 100% fraudulent.
On July 6th, Josh Flo published the below piece on DisneyGuide.com (again, the content was removed from Disneyguide.com)
This was again covered by TheFly: https://thefly.com/landingPageNews.php?id=3123795&headline=GNUS;DIS-Genius-Brands-rallies-after-report-of-Disney-stake-in-POW-Entertainment
Then, later in the day on July 7th, TheFly spotted that something was very wrong in this post:
Let’s put this into perspective: On the 6th, the stock traded 170,176,462 shares, and on the 7th the stock traded 135,704,257 – remember the average volume for GNUS is 30,000,000 shares a day. This is a huge increase and hundreds of millions of dollars have been siphoned off from investors with this fraud.
The piece did not stay up long because it did not need to, and the share price did not go up much – but that was never the intention. The goal here was volume. It is this volume that allowed Moez Kassam and Anson Funds to do exactly what they needed to and disguise their actions from everyone around them.
This led to a revolt from shareholders and investors online, as well as a flurry of negative commentary from traders and followers:
It was also covered on Benzinga: https://www.benzinga.com/news/20/07/16589312/genius-brands-pops-and-drops-on-sketchy-rumor
So, now what happens?
For Moez Kassam and Anson Funds, the weak link is … indeed weak.
We have reached out to Josh Flo and he has confirmed that he is the owner of DisneyGuide.com. He also confirmed that he published the reports.
When confronted about market manipulation and fraud, Josh Flo responded: “Look I didn’t do any market manipulation on purpose, I’m not nearly smart enough for that. I was just playing around with my new blog site.”
Below is a copy of the mail where Josh admits to making the posts:
Flo did make a half-hearted attempt to hide the ownership details of the domain – but this is very easy to uncover and here is Josh Flo applying for a trademark on the name: https://uspto.report/TM/88960638
We also have the e-mail conversation in which he admits to owning the domain and publishing the fake information. We believe that one of two things can happen now with regard to Josh Flo: 1) Either Moez Kassam will offer him additional hush money; or 2) Flo will come to understand that it is in his best interest to cooperate with the authorities.
We’ve also archived the Twitter and StockTwits posts in case there is an attempt to remove them as this investigations gains momentum:
Stocktwits archive 1
Stocktwits archive 2
Twitter archive 1
Twitter archive 2
SEC – I hope you will be having a conversation with Josh Flo on this illegal activity, fraud and deliberate manipulation of a NASDAQ listed stock. This is serious and needs to be investigated.
Also what is the relationship between Anson Funds and Nate Anderson of Hindenburg Report. Has Nate ever received a payment from Anson or any of their affiliates? Have there ever been any “consulting agreements” between the two of them? Maybe somewhere else for the regulators to look.