How Anson Funds created a fake Disney website and made $100 million by ripping off U.S. investors

We have new updates to the June 2020 Genuis Brands fraud–when Anson pulled off its biggest heist to date against retail investors. This is a direct call to the SEC and regulators to act. There is enough evidence in this report alone to send people to jail.

THIS IS A DETAILED MUST READ FOR ANYONE WHO WANTS TO UNDERSTAND HOW ANSON FUNDS OPERATES ABOVE THE LAW

Anson Funds was the driving force behind the manipulative long-short campaign for entertainment company Genius Brands – GNUS, since renamed as Kartoon Studios (TOON). With the help of Nate Anderson and Andrew Left, the trimuverate causer retail investors to lose billions of Dollars, while Anson Funds made close to $100m profit off the fraud.

A strategic plan was initiated by Anson to make the stock price adhere to the Fund’s long-short rule of “Elevator up, Stairs down”, with the addition of a ‘safety net’. Anson would do all of this while giving GNUS and regulators the impression they were “long” the stock.

In late May/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 Moez Kassam setting up his manipulative long-short strategy by creating unsubstantiated rumors, according to our sources inside Anson offices.

The pump was a multi-prong strategy, having started months earlier with the linchpin being the creation of a website called DisneyGuide.com (which sounds like an official Disney website – which was the point.)

They then used this website to create fake positive rumors about the Genuis Brands stock being in merger talks with Disney. Once the website was live, they then had their social media trolls start a huge campaign across various community sites spreading rumors about how Genuis Brands was going to get taken over by Disney and other business projections that were far removed from reality.

Now Anson Funds aren’t stupid. Kassam found a patsy to register the DisneyGuide domain name, a gentleman called Josh Flo, who at the time had no connection to Anson. This was the first part of Josh Flo’s services for Anson. (We will circle back to Flo in more detail shortly and even publish our email conversation with him in which he admits to the fraud he committed to manipulate the share price of Genius Brands.).

So with the domain name registered, Anson took over, creating the fake Disney website in their Toronto office, and even hosting it on their private servers. Then the massive social media promote began.

It was a huge success, all based on lies concocted by Anson Funds. Off the back of this fraudulent campaign, Genius Brands 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 US$12+ 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. (these pumpers were paid by Anson and were working from the Anson office in Toronto. The Canadian regulator (OSC) even fined them for this unethical behavior.)

But this was quite enough for Anson. The Fund had made a huge amount of money on the upside, and now, it was time to make just as much on the downside and help cover those naked shorts at a much cheaper price. (We will explain below how Anson was able to have naked short positions.)

They concocted a plan with a number of players on the short selling side – the principal ones being Nate Anderson and Andrew Left.

Enter Andrew Left

Now, before the big Hindenburg hit piece was to come out, Anson wanted the slide in the GNUS stock to accelerate, because at that very moment, Anson was the only one selling, and Kassam needed to create panic to accelerate the fall and bring retail into the game.

So on June 4th 2020, one day before the Hindenburg report came out, Andrew Left of Citron Research (a good friend of Moez Kassam 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 (Andrew Left has since deleted this Tweet to hide his association with the fraud, but the DoJ will have no trouble retrieving it. It was picked up by Yahoo though.)

(REMEMBER – Andrew Left has recently been charged by the SEC and has also received criminal charges from the DOJ with his court hearing scheduled for later this year. Anson Funds was mentioned in these charges and also fined by the SEC for its involvement with Left on three different occasions.)

Left’s Tweet had the desired effect and the stock cratered. But it was only the beginning. Anson needed more.

Enter Nate Anderson:

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 recent lawsuit files a partner of Anson Funds who works on a pay for play basis. Destroying companies that Anson Funds puts in his path.

Nate Anderson, of course, has denied the allegations, but we know from multiple sources and court filings that he is directly associated with Anson Funds.

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 and Anson Funds manufactured in the first place. The report also 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 created this situation.)

(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 would have been paid as a consulting fee, on top of a balance sheet arrangement they had. The consulting amount is believed to be in excess of $300,000 USD. The payment was made to Nate Anderson’s company, ClaritySpring – where a number of other payments had gone for hit pieces Anderson wrote for Anson – see Aphria.

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. This happened because the majority of the report was written by Anson Funds, which had been working on it in advance. Nate Anderson merely made a number of edits to give it his “voice” and then put Anson’s report out on the Hindenburg website, similar to what they did with the Facedrive fraud.

Anson Funds had the perfect cover all along by being “Net long” the stock.

The ‘net long’ term is something hedge funds use to hide their real positions. As we found out from another lawsuit against Anson where Moez claims they are net long stocks they are attacking, to hide their nefarious actions (Moez Kassam Depositions).

How this often happens is that hedge funds acquire cheap stock that is restricted, meaning they will not be able to sell it for many months or years. What they then do is pump up the share price and use this restricted stock to borrow against. (They shouldn’t be allowed to do this – but as we have seen from the multitude of fines and lawsuits against the banks and brokers – the rules are meaningless.) They then start selling hard, and shorting the stock. When it hits their target they either buy it back in the market or don’t – it all depends on the borrowing rate and how much fear they can create. Then they cover when their stock is free-trading, if they need to.

But if anyone asks, Anson will say that it holds a positive outlook on the stock and is ”net long.” This is Anson’s response to the regulators, journalists and others who don’t get how the game is really played.

And, yes, they are ‘net long’ as they have a larger long position than they do short, but they could never have sold their long stock anyway, especially not at the elevated price.

It’s also important to remember that Anson Advisors was charged by the SEC in October 2023 for violating rule 105 of regulation M, which prohibits short selling a stock during a restricted period, so they have form.

Lets take the following example to further explain ‘net long’: Anson purchases 10 million shares of a company at 26 cents – but the stock is restricted and it can’t sell it as per the shareholder agreement.

Instead, Anson pumps the stock to $12 (when in reality it’s not worth this and never will be). Then Anson shorts the stock and sells it down from $12 to $6 – selling 9 million shares and making a huge profit (using restricted stock as collateral.) But Anson is still technically ‘net long’ because there is a net long position of 1 million shares. It’s criminally head-spinning.

Anson Funds position in Genius Brands

Now we know that Anson had been invested in Genius brands for some time and don’t know their exact share position.
But according to the Augenbaum lawsuit they increased their position in Genius Brands

On March 22 2020 for $0.2568
On May 7 2020 for $0.35
On May 18 2020 for $1.20
On May 28 2020 for $1.50

All research suggests that once Anson added to their position in March 2020 they started pumping the stock from 0.23 cents in April 2020 to $12.00+ before the June dump, through the use of false rumors and social media marketing.

DisneyGuide.com and Josh Flo Come to the Rescue

After the Hindenburg report came out, GNUS stock plummeted too far and too fast, causing Moez Kassam to panic because he likes the stairs down approach as it allows him to disguise his actions much more cleanly.

To fix things, Kassam’s team and people linked to Anson used 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.

This is where our investigation uncovered that the owner of the DisneyGuide.com domain was Josh Flo, introduced above. At the time of the fraud, he was a used car salesman and realtor from Minnesota. He currently works in construction for Sota Contracting and Dave Knutson Siding. You can see his Facebook page here and his Tiktok channel here.

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 a stooge 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 )

Josh Flo Commits Securities Fraud

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 9^th, Flo suddenly posts something about a random oil stock to make it look like he is now interested in equities; and then on June 11^th, all attention shifts to GNUS.

The entire social media back-and-forth has Josh Flo talking to himself and commenting on his own posts on different platforms. Drumming up support and adding credibility to his fraudulent rumors.

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” that comments on a media company.

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

The Impact of this fraud:

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 15^th, 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 3^rd of June to $3.97 on the 9^th June. Then on the 10^th 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 fell a little but still traded 151,898,954 shares.

Then, on the 12^th, it recovers to $4.16 with 95,905,448 shares traded.

The next day of trading is the 15^th 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 at the time was 30,000,000 shares a day.)

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 is very capable, with sophisticated trading techniques that 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 attacks work 9 out of 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 6^th, 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 7^th, TheFly spotted that something was very wrong in this post:

https://thefly.com/landingPageNews.php?id=3123811&headline=GNUS;DIS-Genius-Brands-gives-up-gains-after-Disneyfocused-blog-pulls-POW-report

Let’s put this into perspective: On the 6^th, the stock traded 170,176,462 shares, and on the 7^th 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:

https://stocktwits.com/_Dreamer_/message/226803527

It was also covered on Benzinga: https://www.benzinga.com/news/20/07/16589312/genius-brands-pops-and-drops-on-sketchy-rumor

More coverage:

https://www.reddit.com/r/gnus_stock/comments/hosv84/disney_set_to_buy_5_percent_stake_in_pow/
https://www.benzinga.com/news/20/07/16589627/genius-brands-ceo-andy-heyward-discusses-recent-circulation-of-report-suggesting-disney-could-buy-5
https://stocktwits.com/Vegas1/message/226783189

Josh Flo Admits to Securities Fraud

We 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 and committed fraud.

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:

We are happy to send this email exchange to regulators if they have any interest.

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’ve also archived the Twitter and StockTwits posts in case there is an attempt to remove them as this investigations gains momentum:

Stocktwits archive 2
Twitter archive 2
Disneyguide.com archive

SEC – we 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.
As for Left and Anderson – it’s just another fraud case to throw at them.

We are working on a new update as well. Lots of interesting information coming from our people inside Anson.