Table of contents:
Introduction
Payments to Hindenburg
The Facedrive emails (All of them)
Anson Funds trades in Facedrive
Anson Funds profits on Facedrive trade
Distributing the report ahead of publication
Anson Funds created Hindenburg
Other Interesting Facedrive information and Globe & Mail relationship
Moez Kassam recording – creating catalysts
Banks and brokers helping Anson Funds
Deposition
Globe & Mail
Communication with other short sellers ahead of report
Accounting Fraud
Insider Trading with Hindenburg
Brand Hijacking
Main File page can be found here
Introduction:
In our previous report, we mentioned how Nate Anderson and Anson Funds committed securities fraud and included one document with a conversation between the two companies.
Today’s piece goes into more detail and contains links to the full chain of communication between the two, including emails, drafts, research – everything the regulators need to press charges and the readers need to understand the full extent of what they have done here and how they work with other short researchers. This is how Anson Funds does business, and that MO has been repeated on dozens, if not hundreds, of occasions. The headlines may be about Andrew Left and Hindenburg, but make no mistake, Anson Funds is the head of the snake.
The news world has been abuzz with coverage on this story, with dozens of articles published about their partnership. Of course, Nate Anderson had to comment and deny any wrongdoing to the journalists at Business Standard, but these comments are about to age badly–very rapidly.
Anson Funds payments to Nate Anderson:
Nate Anderson has denied, on multiple occasions, that Hindenburg has a financial relationship with Anson Funds, or that he has ever been paid by them. This was covered recently by the Economic Times Legal section, which said the following:
Following the article, Anderson also publicly denied any partnership with Anson or anyone else. However, leaked emails suggest otherwise.
Dozens of emails exchanged between Hindenburg and Sanjeev Puri of Anson in 2019 over a trade indicate that Anson took the editorial lead, with Hindenburg having little to no editorial control. It is still uncertain whether there were any financial arrangements between the two.
Thanks to the court documents, we now have proof that there is indeed a financial arrangement between Hindenburg and Anson, and it has been going on for years with Clarity Spring, Nate Anderson’s company sending an invoice to Anson Funds on April 27, 2018, just a few days after Hindenburg put out two hit pieces on Aphria.
This can be found on Anson Funds Schedule B-1, which you can see here: Anson Schedule B1.
The email has the following information
(Document number) BLK00001535 – 4/30/2018 5:40 PM
Title: FW: Invoice
Attachment with the title: Microsoft Word – 2018.04.27 ClaritySpring Invoice Anson
This invoice was paid after two hit pieces from Hindenburg on:
March 21, 2018 – https://hindenburgresearch.com/could-rampant-red-flags-drown-aphrias-proposed-nuuvera-acquisition/
and
March 22, 2018 – https://hindenburgresearch.com/aphria-insiders-disclose-stake-in-nuuveras-initial-financing-round-just-1-day-before-expected-deal-closing/
Before Hindenburg published these reports there were multiple emails from Anson Funds employee Sunny Puri (who we will see much more of in the Facedrive fraud below) to Nate Anderson discussing Aphria.
You can find more on Aphria and other companies in the Schedule B-1 discussion here.
Regulators should force Nate Anderon to hand over all bank records for Clarity Spring dating back to 2012. We believe they will find all the evidence they need in these records to prosecute for wire fraud.
The Facedrive emails
Court File: M3: Page 63 – 408
We have tried to make it as easy as possible for readers to access the emails and their attachments. The emails are listed in order of date and accessible via hyperlink.
10th July 2020 – Mail from Michael Roussel of Anson Funds to Nate Anderson – starting it all off with the bare bones of a hit piece and other information.
(Link to mail) (Link to Research)
14th July 2020 – 16:35 – Nate Anderson to Michael Roussel – Nate showing research (Attachment)
(Link to mail) (Link to Research)
14th July 2020 – 18:09 – Michael Roussel of Anson Funds to Nate Anderson – Large amount of research and notes on target company. A lot of Michael’s notes made it into the final report.
(Link to mail)
14th July 2020 – 20:06 – Sunny Puri of Anson Funds to Nate Anderson – Ideas for Nate Anderson to put in report.
(Link to mail)
17th July 2020 – Mail from Michael Roussel of Anson Funds to Nate Anderson – discussing their recent conversation and more research Anson Funds has obtained.
(Link to mail) (Link to Research)
19th July 2020 – 20:28 – mail from Nate Anderson to Michael Roussel – asking for more details on Anson’s investigations and conversations.
(Link to mail)
19th July 2020 – 21:04 – Mail from Michael Roussel of Anson Funds to Nate Anderson – Anson Funds research and full conversation with 3rd party providing information on target company.
(Link to mail)
19th July 2020 – 21:04 (part 2) – Mail from Michael Roussel of Anson Funds to Nate Anderson – Anson Funds research and full conversation with 3rd party providing information on target company. (Link to mail)
20th July 2020 – 16:20 – mail from Nate Anderson to Michael Roussel – asking where he obtained some information from
(Link to mail)
20th July 2020 – 16:48 – Michael Roussel of Anson Funds to Nate Anderson – Handing over a large amount of information and research on target company.
(Link to mail)
21st July 2020 – 23:35 – mail from Nate Anderson to Michael Roussel – First draft of report. (attachment)
The email says this:
“See attached. Unedited but it should give a flavor. Still needs organization/editing and fact checking of course but let me know if any ideas or needs jump out based on what we have thus far.”
This is a paid for hit piece and the hired gun is asking what else his paymaster needs inserted in the report. Nate has hung himself here.
(Link to mail) (Link to Report)
22nd July 2020 – 14:02 – Mail from Sunny Puri of Anson Funds to Nate Anderson. Giving him multiple paragraphs he wants in the report and how it should be worded. The top part of the mail is damning, saying: “Nate, re the following, lets exclude any pictures of emails to Anson. We can instead include them by reference.”
Of course Nate did as instructed and left any pictures of emails to Anson out of the report.
(Link to mail)
22nd July 2020 – 14:36 – mail from Nate Anderson to Sunny Puri – with the following response: “Ok sounds good”.
Not a lot of editorial control there. He inserted what he was told to insert into the report.
(Link to mail)
22nd July 2020 – 20:41 – mail from Nate Anderson to Sunny Puri – with the following response: (attachment)
“Bullet points need some work but take a look. Any and all ideas welcome”
(Link to mail) (Link to Report)
22nd July 2020 – 22:13 – Mail from Sunny Puri of Anson Funds to Nate Anderson (attachment)
Multiple paragraphs from Sunny Puri to be added to the report – saying, We should add the following:
(Link to mail) (Link to Report)
22nd July 2020 – 22:33 – mail from Nate Anderson to Sunny Puri – Nate’s responses to all of Sunny Puri’s instructions and suggestions.
(Link to mail)
22nd July 2020 – 22:37 – Mail from Sunny Puri of Anson Funds to Nate Anderson
Some instructions from Sunny Puri telling Nate to, SKIP IT – parts that he doesn’t want inserted in the report.
(Link to mail)
22nd July 2020 – 22:47 – Mail from Michael Roussel of Anson Funds to Nate Anderson. (attachment)
The following message: “We’re be back with comments on the body, please read front page asap, we’ll give you a call in five”
The attached document shows Sunny Puri and Anson Funds selecting the price target and % downside. They make a huge number of edits to the entire report, which are incorporated by Anderson (north of a thousand words). Of course he incorporated them – he is being paid to do so.
(Link to mail) (Link to Report)
22nd July 2020 – 22:59 – mail from Nate Anderson to Sunny Puri – (with edited document attached)
Where all of Ansons changes have been accepted.
(Link to mail) (Link to Report)
23rd July 2020 – 12:46am – Mail from Michael Roussel of Anson Funds to Nate Anderson (Attachment)
Saying: “Latest draft here, believe we are in a much better place now. Looking forward to tomorrow. To full downside, Mike”
There are more Anson Funds edits to the report.
(Link to mail) (Link to Report)
23rd July 2020 – 06:03 – mail from Nate Anderson to Michael Roussel
Nate responding: “Were there any edits in this one? I don’t see any changes tracked. Not sure if you just did them non tracked. Either way I’ll read through it”
(Link to mail)
23rd July 2020 – 06:08 – Mail from Sunny Puri of Anson Funds to Nate Anderson (attachment)
With below comment: “Not tracked (changes are all there), I can send you a black line in 7-10 minutes. I’m also online to assist or answer any qs.”
Edited report has multiple changes.
(Link to mail) (Link to Report)
23rd July 2020 – 06:28 – mail from Nate Anderson to Sunny Puri
Nates response: “This all looks based on the old draft rather than the new draft?”
(Link to mail)
23rd July 2020 – 06:33 – Mail from Sunny Puri of Anson Funds to Nate Anderson (attachment)
With below comment: “Updated, use this, ignore last.”
The attachment has a large number of edits made by Anson Funds
(Link to mail) (Link to Report)
23rd July 2020 – 07:42 – mail from Nate Anderson to Sunny Puri (attachment)
Nate says: “Review attached for any required final edits/changes.“
(Link to mail) (Link to Report)
23rd July 2020 – 08:00 – Mail from Sunny Puri of Anson Funds to Nate Anderson (attachment)
With below comment: “Back in 5-10.”
(Link to mail)
23rd July 2020 – 08:12 – Mail from Sunny Puri of Anson Funds to Nate Anderson (attachment)
With below comment: “Attached with blackline.”
This is SO IMPORTANT because it was Anson Funds that made the final edit to the document. Anson Funds was in charge at all times, and Nate Anderson had very little editorial control because he was being paid by Anson Funds to put this hit piece out.
(Link to mail) (Link to Report)
23rd July 2020 – 09:12 – Nate Anderson Mail of link to live report to D Kim of Anson Funds
(Link to mail)
23rd July 2020 – 09:12 – Nate Anderson Mail of link to live report to Moez Kassam of Anson Funds
(Link to mail)
23rd July 2020 – 09:12 – Nate Anderson Mail of link to live report to M Roussel of Anson Funds
(Link to mail)
23rd July 2020 – 09:12 – Nate Anderson Mail of link to live report to Sunny Puri of Anson Funds
(Link to mail)
23rd July 2020 – 09:12 – Nate Anderson Mail of link to live report to T Datoo of Anson Funds
(Link to mail)
An important note with these reports and the final report that Nate published on his website is that there was no mention of any relationship or payment from Anson Funds in the disclosure.
Here is the current version of the report on his website: https://hindenburgresearch.com/facedrive/
And this is an archived version from the 26th August 2020: https://web.archive.org/web/20200726054045/https://hindenburgresearch.com/facedrive/
Anson Funds Trades in Facedrive during the writing of the report
Below are the trading records we obtained from the court that were provided by Anson Funds as part of productions. These records don’t appear to be complete as the first trade Anson posted was a cover for 63,495 shares, which obviously can’t be the first trade the fund made. But there is enough for us to see what they Anson was up to and for regulators to take action.
As you can see from the date of the first email between Anson Funds and Hindenburg, they were shorting the stock every day. Then, the day Nate Anderson puts out his short report (July 23), Anson Funds starts covering.
Anson and Hindenburg created their own event! The intent was to damage the company and manipulate the stock, as can be seen with the quote from Michael Roussel of Anson Funds: “Latest draft here, believe we are in a much better place now. Looking forward to tomorrow. To full downside, Mike”.
Intent is very important, and what we have here is a 100% case of stock manipulation.
We mentioned previously why this is a crime:
The second, and probably bigger, issue for Anson Funds is that the fund is orchestrating a short campaign while simultaneously purchasing the stock to cover its shorts. In other words, in the same way that the SEC charges “pump and dumps”—when people orchestrate long campaigns, and then sell into the demand created by the promotional reports—it is equally fraudulent under the 1933 Act and the 1934 Act to orchestrate a short campaign, and then buy into the demand created by the promotional reports.
You can see the records here or below:
Anson’s profit on the trade
In the UNDERTAKINGS, QUESTIONS TAKEN UNDER ADVISEMENT, AND REFUSALS (page 139) – T7
Anson Funds advised on how much money it made on shorting Facedrive: $1,715,663.03.
Not that we believe this number and have heard it was north of $30 million (from a source inside Anson). However, this might be something for the company or regulators to look into.
Distributing the report ahead of publication?
In the FACTUM OF THE PLAINTIFFS/RESPONDING PARTIES (Motion returnable of November 15, 2024) – DM16 – we found buried something very interesting.
Page 3
The Moving Defendants’ motion boils down to requests for:
two emails exchanged between the Plaintiffs and Josh Fineman of Bloomberg News in July 2020 surrounding research issued on Facedrive;
Page 5
The Plaintiffs inadvertently missed two emails between the Plaintiffs and Joshua Fineman in preparing their supplementary productions. Those emails and their respective attachments have now been produced.
Page 13
31. The Plaintiffs inadvertently missed a total of two emails between Sunny Puri and Joshua Fineman. These emails (with their attachments) have now been produced to the Moving Defendants, without issue.
So, the question now is whether Sunny Puri of Anson Funds was distributing the report to other journalists/short sellers ahead of publication? If yes, then that is another securities law violation. We couldn’t find the actual emails and their attachments. We are asking the court to help us locate them.
Anson Funds created Hindenburg
During a Whatsapp conversation Moez had with a defendant, the discussion turned to Hindenburg.
Moez gave the following response on 7/6/2019 at 8:22PM: “I gave Hindenburg his entire file.”
That is a lot of companies that they collaborated on, and the collaboration is stated in Moez Kassam’s own words.
(Full details can be found here: Canntrust conversation – Hindenburg & Andrew Left)
Other interesting Facedrive information from the court docs (Globe & Mail)
In the deposition of Moez on Day 2, he was asked the following question:
How big was Anson’s short position in Facedrive? Moez responded by saying he believed “our largest position, short position in Facedrive was 400,000 shares”.
This is a lie, and something the regulators should be able to prove easily. (You can go to the full deposition notes here, on page 29, sheet 70).
At Marketfrauds, we have repeatedly covered the relationship Anson Funds has with the Globe & Mail and how the media outlet serves as the unofficial mouthpiece for the fund.
That renders the following very interesting:
During the same deposition, Moez was asked the following:
Q. Have you talked to Mr. McArthur about Facedrive?
A. I believe we have had conversations about Facedrive.
Q. What do you recall about your diligence that you shared with Mr. McArthur?
A. I believe we shared diligence, you know, of, you know, publicly available information that was out there that I thought was an interesting story for him. (Page 34 sheet 392)
Greg McArthur found this information so interesting that he and his colleagues wrote about 10 articles on Facedrive. It seems that many of Anson Funds’ target companies receive a huge amount of terrible coverage by The Globe.
The Globe & Mail relationship is further exposed in UNDERTAKINGS, QUESTIONS TAKEN UNDER ADVISEMENT, AND REFUSALS given at the Examination for Discovery of Moez Kassam held on April 20 and 21, 2023 (T7 – Pages 140 to 143)
Page 140. To advise whether, beside the Master Fund, there were other Anson Funds involved in the shorting of Facedrive. YES
Page 142. To check records and advise whether Mr. Kassam have talked about ReconAfrica with anyone else at the Globe and Mail other than Greg McArthur and Mark Rendell. Yes. Mr. Kassam advises that he spoke with Geoffrey York at the Globe & Mail.
Page 142. To check records and advise whether Mr. Kassam have talked about Facedrive with anyone else at the Globe and Mail other than Greg McArthur and Mark Rendell. Yes. Mr. Kassam advises that he spoke with David Milstead at the Globe & Mail.
Page 143. To check records and advise whether Mr. Kassam have talked about Aphria with anyone else at the Globe and Mail other than Greg McArthur and Mark Rendell. Yes. Mr. Kassam advises that he spoke with David Milstead at the Globe & Mail.
More Globe & Mail – threatening defendant
And the Globe relationship comes up again with Moez threatening one of the defendants on a call with a nasty article in the Globe & Mail, which he actually followed up on.
(You can find a transcript to the call and a link to the voice recording here, on pages 15-19)
Moez said the following:
“As you are aware the Globe & Mail has been working on a big piece on this whole thing and they are waiting for us to file a claim to see who else is involved. And given your history and rap sheet and all that, it’s going to be interesting there.”
“I’ll send you the file, you guys make a decision and if I don’t hear back from you, Wednesday this is all getting filed and you will be hearing from the Globe and everyone else I’m sure shortly thereafter.”
The Globe works for Anson. Regulators???
OLDER RESEARCH
Moez Kassams Own Words: Creating Catalysts
“A lot of times if I’m working with Ben Axler (Spruce Point Capital) or doing this kind of stuff then we can create our own catalysts right because we’re putting out a report. So I know when stuffs gonna go down and I’ll buy puts. It’s very easy to know…a lot of people know when something is coming so they’ll buy puts and you know he makes 50 puts per day so I’ll make 2000 trades today and that hurts the stock the next day when the report comes
Anson Funds has help from the banks and brokers:
Here is an example of how the banks illegally helped Anson Funds on the Facedrive short:
On the morning of July 24th 2020, RBC put an offer up of 75,000 shares of Facedrive at $14.16 (all out in the open).
This wasn’t a real order, though. It was there with the sole intention of spoofing the market. Then, two minutes before the market opened, it was pulled as a favor to Kassam. Further digging will likely establish a pattern of the same over and over again
The strange thing is that in the deposition, Moez only said that he traded through TD Bank. Why then are RBC spoofing the market in Facedrive for him? (See Moez Kassam Deposition Notes)
This is the type of behavior regulators love to penalize. In fact, K2 & Associates Investment Management was fined for doing this exact same thing.
Communications with other Short sellers:
When Anson Funds got into a bind with the Facedrive short, Moez apparently ran to his hedge fund buddies, MMCap, K2, etc… and asked them to short Facedrive, promising them that the Hindenburg report would send the stock down to $5 (it didn’t) and they could all cover and make a lot of easy money.
Moez put word out on the street amongst all market participants, with one of them having the following Whatsapp conversation with him:
Lets just look at this perfect example of insider trading between short sellers. They are discussing Facedrive and the person on the other end of the message is mocking Moez as Facedrive had moved against him and his short was proving to be very painful. Moez says to check back with him on Monday. Then, on Monday, the share price of Facedrive starts falling hard from its high. This was because of the huge amount of paper that was created by short sellers in Anson’s syndicate getting ready for a big short report about to come out.
Then later on, Moez asks if he is loaded up. He responds that yes – 10,000 shares. He asks if tomorrow is good (for the short report being published).
Moez then asks if he sees anything from the big boys. On July 23, Hindenburg puts out a very aggressive and negative report. THIS IS INSIDER TRADING. Moez knows a hit piece is coming out on Facedrive as he put the whole thing together and is trying to get other traders to go short the stock ahead of time.
Accounting Fraud
There was an interesting post on Twitter recently: https://x.com/trvsrdrgz2/status/1883352577343140194/photo/1
The post says the following:
“Anson Funds inaccurately recorded the payments for the benefit of Individual A in its journal and ledgers as payments to the third-party intermediary for “research services”
when in fact they were to Individual A for trading profits.”
This is how they hide 100.
One would imagine that since they are a registered entity with multiple regulators, filing false or misleading financials would be viewed very harshly. By intentionally mis-booking these payments on a regular basis could be viewed as accounting fraud and should invite heavy scrutiny from the regulators and a thorough audit of their trading books.
Insider trading and Hindenburg Research
Nate Anderson of Hindenburg Research and Moez Kassam have worked together for years, with Kassam even claiming he had given Anderson his entire file.
Below is a prime example of the type of insider trading that has taken place between Anson and Hindenburg:
Just a few days before Nate Anderson put out his short recommendation on SOS, Anson Funds’ holdings (in the middle of all the crypto hype) dropped to zero, which is highly unusual and highly unlikely. More likely is that they not only sold the stock but also initiated a large short position. That means Nate Anderson let Anson Funds know ahead of time about the short report. That is insider trading, and it is a hallmark of Anson’s relations with Nate Anderson of Hindenburg Research, Ben Axler and Andrew Left of Citron Research.
Brand Hijacking of Facedrive – Another Dirty Anson Tactic
On 30 January 2021, Anson Funds are believed to have launched a cyberattack on the Facedrive website. Anson are very capable when it comes to cyber crimes, and willing to spend top dollar for such services. They also engaged in brand hijacking of Facedrive on Google.
All of Facedrive’s major search terms were taken by an anonymous advertiser, effectively hijacking terms such as Facedrive Stock, Facedrive Stock Price, Is Facedrive a good investment, Facedrive news, Facedrive vs Uber, Facedrive Canada, Facedrive Inc News, Facedrive Company, Facedrive Health. These then all pointed to the Hindenburg report on the company. https://hindenburgresearch.com/facedrive/
During this time, a source connected to Facedrive said the company had experienced multiple hacking attempts on their various portals, while their customers and partners were receiving daily phone calls from anonymous people making up lies about the company and their staff in a direct effort to harm the underlying business.
This was a very aggressive campaign that likely cost tens of thousands of dollars to launch. Nate Anderson denied any knowledge of this, but it is likely he was still working with Moez Kassam to damage the company.
Facedrive have more than enough evidence here to start a legal case against Anderson and Anson for brand hijacking and intentional damage to their business and reputation.