Market Frauds

Moez Kassam & Anson Funds: Panic as DOJ Widens Investigation

Moez Kassam & Anson Funds

Moez Kassam & Anson Funds

[UPDATE: Moez Kassam calling old business partners threatening them if they speak with the press about Anson Funds illegal dealings. If he sees their names in print he will not only sue them, but has guaranteed them bad press with one of their bought off journalists. Rumored to be Greg McArthur of the Globe & Mail.]

This is part 3 of a 4 part investigative series looking into the illegal activities of Anson Funds & Moez Kassam.

Part 1 can be found here: https://marketfrauds.to/moez-kassam-and-anson-funds-a-tale-of-corruption-greed-and-failure/
Part 2 here: https://marketfrauds.to/moez-kassam-anson-funds-part-ii-rotten-to-the-core/

Countless retail investors have lost billions of hard-earned dollars, scores of companies have been destroyed, and the capital markets have faced their biggest threat since their inception.   

Now, after years of waiting for the authorities to take action against Anson Funds, the biggest media institutions and the Department of Justice (DoJ) have finally rallied to assess the phenomenal level of damage and met out punishment. 

The initial investigation is rumored to have started with the SEC, but the extent of the crime was so great that they went to the DOJ to switch from civil to criminal and to call upon more resources which the DOJ offered.

People should also understand how seriously the DOJ is taking this as their California division is one of the most powerful and accomplished within the body. One of the reasons it is believed this was handed to them is because of the racketeering nature of what Anson Funds and its partners are doing. They behave like a mob, they engage in wire fraud, money laundering, market manipulation and a host of other crimes that potentially fall under RICO (Racketeer Influenced and Corrupt Organizations Act). This is serious and the head of the snake as everyone knows is Anson Funds. Citron Research and Muddy Waters might be the headline names, but it’s Anson Funds who we believe are the main target.

People need to understand that the DoJ has a 97% conviction rate, and anyone in their crosshairs (and Anson is) isn’t getting away lightly. 

Punishment will hopefully ensure that illegal short-selling outfits such as the Moez Kassam-led Anson Funds can no longer operate on the level of a criminal organization with the singular goal of making hundreds of millions by destroying faith in capital markets and robbing retail investors of everything they have.   

This 24-page report, the latest in our series, offers readers a lineup of updates based on new information uncovered since the start of a DoJ investigation into this cabal of short-sellers. 

Aphria: The Full Shocking Story

Moez Kassam’s modus operandi in inflicting severe damage upon cannabis company Aphria, with the help of Nate Anderson at Hindenburg Research, is already well-known, and we have published extensive information on this case.   Anson’s staff put together the majority of the short report/hit piece on Aphria that Kassam had obtained from his close relationship with Aphria management, passing that information along to Nate Anderson, who claimed credit for the research. Prior to the release of the report, Anson sold its positions and took a large naked short. We believe that a thorough investigation of Anson’s various funds, LPs and off-book structures would turn up the necessary hard evidence of this paper trail. Most likely, DoJ investigators are already combing through this as part of their forensic sweep. 

But the story of Moez Kassam and Aphria is much bigger than most people know.  

For years, Moez had been getting close to Aphria management, trying to insert himself into their inner circle in order to obtain inside information that could be used to his advantage. We believe Aphria management were unwitting pawns in his plan.

This inner relationship burgeoned when he learned, on 10 October 2018, that Altria was close to investing $1.8 billion into Aphria, valuing the company north of $26 a share.

The chart below shows the sudden reversal in Aphria’s share price and the increase in volume. However, it is also necessary to look at the options markets. Anson always love to leverage up to the max when trading on insider information and they purchased a large amount of call options to maximize their gains from the deal. If you look at Aphria historical option trading there was a big jump in contracts traded on October 10th 2018 – 13,572 contracts traded. The average for the pervious month was around 3,000 contracts.

Then, in mid November, Anson learned that the deal with Altria had fallen apart due to some missteps on the part of Aphria management and Cronos was to win the deal. Kassam was reportedly furious until he saw a great opportunity to make even more money.

Thus, the plan to attack the company was born. Moez started selling the stock that Anson held in Aphria in the market and also going naked as he knew the report was coming soon and there was little risk to him.

Anson also loaded up on out of the money put options. We believe the below contract purchases are Anson Funds alongside other large options trades on the days running up to the publication of the Hindenburg/Anson hit piece:

APHA CN 12/21/18 P8 – 11/26/2018 – 2,836 contracts
APHA CN 12/21/18 P9 – 11/26/2018 – 2,127 contracts

Up until this time there had been very few out of the money put purchases in the options market.

This was how Anson was to maximize their gains on the inside information they had on the Altria deal and combined with the huge short and distort campaign they had planned with Hindenburg and Quintessential they knew that the stock was going to fall hard.

As we have detailed previously, on the morning the Hindenburg report was released, Moez Kassam was calling all the banks, brokerages, and everyone with a serious position to tell them the stock would never open again as it was under investigation by the fraud squad and a host of other lies that he knew could cause serious damage.

The Anson network also hit the forums and chat rooms hard in a coordinated effort with various groups to take Aphria down. This effort also resulted in Quintessential Capital Management founder Gabriel Grego, working alongside Anson, calling Aphria stock “worthless”. We believe that a DoJ investigation into Grego’s communications with representatives of the Anson Funds network would demonstrate this connection.

At the same time, class action lawsuits against Aphria were launched upon Anson’s initiation:  https://www.businesswire.com/news/home/20181207005457/en/ScottScott-Attorneys-Law-LLP-Files-Securities-Class

Anson and their relationship with Cronos – more insider trading

The Story of Cronos starts with a company called Peace Naturals. Things ended badly for the Peace Natural founders as Moez ended up stealing their cannabis license, which ended up becoming Cronos. So Moez and Anson were very closely tied to Cronos.

The other company in contention for the deal with Altria was Cronos and the moment the deal with Aphria died Cronos were informed that it was pretty much theirs. When the deal with Altria was announced on Friday December 7th, Anson were already very well positioned to take advantage of the deal they knew was coming.

What this also gave him was intel on when the best time to put out his hit pieces on Aphria would be.

The Andrew Left Con

The next steps in Moez Kassam’s operation against Aphria, however, would land Anson Funds directly within the sights of an ongoing RICO investigation in the United States.

When Aphria stock plunged, Moez Kassam saw an additional opportunity to gain from the upside precisely because the stock had dropped lower than planned.

To ensure additional gains on this scheme, Moez Kassam contacted someone close to the company with his own offer. His offer was sinister and posed a lucrative question: “What would happen if the biggest short seller in the world became a long buyer of Aphria?” The answer was just as lucrative: The stock would go up. To make this happen, Moez Kassam PAID Andrew Left of Citron Research to get in touch with Aphria management and initiate positive coverage on the stock.

On 7th December 2018, Left wrote the following Tweet:

Congrats to
$CRON. A floor has been established- time to rethink all valuations. $APHA is compelling on all metrics. Cdn footprint too large to ignore. Look past the noise – stock should see US$10. More details to come.

That Tweet sent Aphria stock soaring, as noted by Capital markets follower Benjamin Smith:

Wow, @CitronResearch moved $APHA up 9.37% in seconds with this tweet.

Following that Tweet, Left released his report just a week later, on December 18th. Over the course of the next month, the stock moved up with the help of the Anson’s fine-tuned promotional machine.

During this time Moez sent messages to various people in management and large investors in Aphria the following messages:

“my boy Andrew Left to the rescue”.

“See I told you I’m your biggest supporter. I’ve hired Citron to pump this stock, watch it go.”


He was bragging to everyone that Left was working for him and he was saving their asses (his words).

During this time, those who are familiar with Left and his focus on short report writing began to wonder why he suddenly shifted to long reports. That led to initial speculation that he was working directly for Moez Kassam and Anson Funds. That speculation has since been confirmed with a DoJ investigation (and a raid of Left’s premises in 2021).

The inclusion of Andrew Left in the Aphria deal led to a falling out between Moez Kassam and Nate Anderson. The money shifted to Left and Moez Kassam failed to fully pay Nate Anderson for his initial work on the short aspect of this scheme.

Naked Short-Selling Aphria

On the 28th of June 2018, Aphria announced the closing of a bought deal financing for $258,750,794. Our sources believe that Anson wrote a check for $50 million into this deal. This is a move Anson Funds would not make without downside cover, which was achieved through selling stock they did not own. That is the definition of “naked short-selling” and is also calling “front-running” a placement (Private placements can be shorted before in Canada but not short form prospectuses or free trading financings) which this falls into.

A thorough examination of Anson’s positions and trading up to six weeks prior to this financing and through their long list of structures, would provide the authorities with evidence they need to demonstrate naked short selling and shorting ahead of a bought deal.

Where Investigators Need to Look

There is a clear pattern to Anson’s modus operandi, and Aphria is the textbook example, but there are dozens more.

In order to shore up additional evidence of Anson Fund’s orchestration of the Aphria manipulation, our sources suggest that the DOJ looks into the trading and holding paper trail left by Andrew Left six weeks prior to the Hindenburg report release. They should also look at Left’s companies and offshore structures to examine any short positions at that time. Finally, the DOJ should look at any covering and buying activity that took place four weeks after the Hindenburg report release. This is where investigators will see if he covered and bought more before his own, long report was released.

This same investigative procedure must be followed with all Anson structures: For all, the paper trail should be examined for positions in Aphria prior to the Hindenburg report following the downside and prior to the Andrew Left report following the upside. That will provide clearest evidence of market manipulation.

As a result of the DOJ investigation, which has significantly raised fears and upped the ante in the short-selling world, more people have been willing to come forward to work with the authorities on the Aphria fraud investigation. This is a great start, but it also represents only one of dozens of cases of manipulation by Anson Funds.

Moez Mocking the Authorities and Regulators

Since the DOJ investigation was announced, Moez Kassam has adopted a mocking tone on social media. During one drunken ramble in Toronto, he claimed the DOJ investigation was “a fake witch hunt and they’ve got nothing on me. The most I will pay is a few million Dollars. We will be a multi-billion Dollar fund by the end of the year and no one will touch us.” 

The majority of his Instagram posts (on “Munching Moez”) now portray him partying, drinking and having the time of his life in what appears to be a message to the DOJ showing his lack of concern with the investigation and his lack of fear over what is to come.

Those social media posts, however, are smoke and mirrors designed to keep unitholders invested in the funds whilst he moves his assets out of North American and into Dubai and UAE. One of the plans he is considering according to our well-placed sources is shutting down Anson Funds and relaunching in Dubai where his illegal activities are not well known and where he believes he would not face the same level of regulatory scrutiny. 

Another source has suggested to us that if Anson Funds survives the DOJ investigation, Sunny Puri is angling to take over the kingdom, while Moez Kassam would relocate to Dubai and engage in the same illegal activities from a new venue with less regulatory oversight and no extradition treaty. According to the source Moez told a group of people: “They are not sophisticated there – it’s like Canada 10 years ago.” In the meantime, Moez Kassam, according to the same source, has noted that it would take very little time to raise the funds to get started again in Dubai.

Andrew Left and the Tilray Short – Assisting Anson Funds

Anson Fund’s Tilray short was a disaster that nearly destroyed the fund. Despite that, Citron’s Andrew Left remained loyal, continuing to write about Tilray in reports and Tweets to attempt to keep a lid on the price movement and assist Moez Kassam with recovery: https://citronresearch.com/wp-content/uploads/2018/09/Our-Final-Word-on-TLRY-before-50.pdf
 
Investigators should look very closely at all communications traffic between Anson Funds, most likely in the form of Sunny Puri, and Andrew Left from this timeframe and compare this to Anson Fund’s position in Tilray. You can find more information on the Tilray short here: https://marketfrauds.to/moez-kassam-and-anson-funds-a-tale-of-corruption-greed-and-failure/

Front-Running Private Placements in the Cannabis Heyday

During the cannabis heyday, Anson was a huge financier and naked shorter of many of the deals out there. But what many people don’t know is that before they wrote the big checks up to $50 million for the cannabis private placements, they were always naked short. And as we noted earlier, Anson already has downside protection in the form of already having made a profit on the initial trade and then holding the warrants if the stock ran away or having the warrant protection if they shorted the stock.

Not only should regulators investigate transactions six weeks prior to and four weeks after Aphria financings in which they participated, but they should look into the same for Aurora, Canopy and Hexo—all in the cannabis sector.

It is important that the DOJ is now on this investigation. Canada’s securities commission does not have the bandwidth to monitor this level of fraud and Anson Fund’s operates with a higher level of sophistication among its network than the Canadian authorities can handle effectively. 

The big banks are fully complicit in this, unwilling to forego the prime brokerage fees, which far exceed any regulatory fines if they are caught. The banks and brokerages responsible for enabling Anson Fund’s illegal naked shorts include TD, RBC, CIBC, National Bank, Canaccord, Cormark and Desjardines, though the latter two no longer work with Anson.

Side Payoffs from MedMen – Defrauding Anson Funds Unitholders

Moez Kassam has a penchant for bragging about how much money he has made outsmarting everyone. Our sources insist that he personally (not Anson Funds) made a fortune on side payments from the Medmen deal, though there have reportedly been many others. This represents a defrauding of Anson Fund’s own unitholders.  

There is a good explanation here of what happened with Medmen and Anson, but our sources provided additional color: MedMen founder Adam Bierman was short of money on their raise, prompting him to seek help from Kassam who offered, on behalf of Anson Funds, a backstop order of around $20 million. In return, Kassam demanded a huge chunk of stock in a side deal paid to both him personally and the fund. That deal worked out well for both Moez Kassam and Adam Bierman who had hit the street with Anson’s $20 million backstop. By using Anson’s name and Medmen’s new fully-funded status, the money came rolling in—as much as $150 million.

The best thing for Anson, according to Kassam, is that the fund did not have to put up all the money that Kassam committed to because so many more orders came in, off the back of this order. And the side payoff was another major benefit, which was not disclosed. That leaves yet another path for DOJ investigators to follow.

Anson Funds and Canaccord: The Fake Fallout

Canaccord made a public showing of no longer working with Anson Funds because of the damage that was being done to their cannabis deals. In a majority of these deals, Anson Funds was directly involved with Canaccord’s Graham Saunders, who may not have committed any wrongdoing in the process, but a witness whom investigators may be able to tap for significant additional information.

Moez Kassam, according to our sources, is close friends with the CEO of Canaccord, spending a significant amount of time at his Muskoka cottage last summer. Moreover, our sources say that Canaccord only publicly exiled Anson Funds, but the move was a smokescreen: Instead, they simply moved Anson Funds off their normal platform and onto their DMA (Direct Market Access) platform. It was a brilliant move on the part of Canaccord. Letting Anson Funds on the DMA means that Canaccord compliance officers are not able to see Anson’s trading and are therefore compliant through ignorance. Anson may simply sign up through one of its many LPs or corporations, obtain an account and continue to use Canaccord, with direct access to its trading terminals. In other words, it all goes through the back door, providing Canaccord with plausible deniability. Not only have our sources informed us about the Canaccord setup; but Moez Kassam himself has been bragging to people about the ruse.

The predictable playbook and the wash-trading fallback

Regulators have been aware of Anson Fund’s wash-trading for some time; however, they lack the bandwidth or motivation to fully understand what is happening, how it is unfolding and the extent to which they can prosecute. Canadian regulators are also very concerned about the pushback from large banks complicit in this. 

Anson Funds has been short a great number of stocks, and the playbook is almost always similar, if not the same.  Typically, when Moez Kassam starts attacking a stock, he accumulates a position the next day, offering it to various brokers through different algorithms to make it appear heavy. Anson Funds creates what appears to be 15 or 20 different people on the offering when in reality it is a single individual. From there, they bid a little bit lower through another broker, trying to force natural selling to hit that bit. If nothing trades, Anson hits its own bid through another broker to get it to trade at a lower price to create volume. That usually persuades other sellers in the market to sell. When Anson fails to get the liquidity it needs, it starts washing trades. From a regulatory standpoint, there will be a beneficial change of ownership, so it never shows up as a wash trade because it appears to be two different people. Moez Kassam uses multiple corporations for this, but it is always Anson Funds on both sides.

For regulators, getting to the bottom of the wash-trading requires going at least two levels deeper in an investigation and convincing the banks to cooperate, which they will not do willingly.

Whilst this illegal trading is going on Anson Funds unleashes their army of trolls on the boards and chatrooms, spreading fear and lies to investors. The next part is to get a friendly journalist like: Greg MaCarthur, Mark Rendell, Niall McGee – all of Globe & Mail to write a scathing piece on the company. This along with Anson’s continuous selling pressure creates an opportunity to push the stock down further. At this point a hit piece usually comes out from one of the Groups Anson work with, Hindenburg, Citron, Sprucepoint, etc… Next come the lawsuits from the ambulance chasers coming out – sometimes dozens of firms posting press releases about fictional wrongdoing and class actions, clogging up the company’s newsfeed and creating more fear and selling. Whilst all this is going on Anson’s algos keep on pushing lower.

Investors and companies don’t stand a chance against this sophisticated and illegal assault.

Criminal Intent: Destruction of companies for personal gain

When it comes to the DOJ investigation, “intent” is an important point. Everything Anson Funds does to a stock it is shorting is intended to hurt the quote.

The difference between what Anson Funds is doing and what normal investors do is important to fully understand.

For example, those who shorted META/Facebook had reason to celebrate their win. If you have warrants in a stock and the stock is trading well above the warrants, you might then short the position to hedge your investment. Likewise, if you think the stock is just going lower perhaps because of missed earnings or weak guidance, competition or even geopolitical reasons, you might then short the position to hedge your investment again.

What Anson Funds is doing, however, is very different. Anson is putting out bad articles, attacking people, spreading lies, and getting stock bashers on various chat rooms to spread fear and uncertainty to unnaturally push the stock down and to intentionally hurt the quote. They then force the quote lower through their illegal trading techniques. That is manipulation. 

Anson’s evil algos

Anson’s algorithms have been written with the intent to damage quotes and the markets of stocks they target. If you break down Anson’s algorithms and saw how the codes were written, you see they are designed to damage and manipulate. The intent is there in the coding.

Again, however, the problem the regulators would have to hire programmers to review those algorithms. And by the time that would happen, Anson Funds would change the code, sending regulators on a wild goose chase. 

Potential witnesses/informants for investigators:

Adam Spears: Former principal of Anson Funds. Spears was involved in a number of illegal activities for Anson Funds, including wire fraud, insider trading, fraud, market manipulation and more. He got cold feet and wanted out when Moez Kassam and Sunny Puri began to take things much further into the realm of high-level market manipulation. Kassam only paid him around $5 million for his share of Anson Funds when it was really worth at least $20 million. Spears could be an extremely useful informant for the DOJ. When he resigned from Anson Funds with his $5 million payoff, he still allowed himself to be inserted by Kassam as a trojan horse into the Zenabis cannabis company. His role in that scheme was to persuade the company to accept a toxic financing deal with Anson. That deal destroyed the company, which was the intention. This is insider trading at its worst. Investigators would benefit from reviewing all of Spears’ conversations during this time, while Salvatori, Anson’s Counsel, would have helped arrange things.  

Amin Nathoo: A principal of Anson funds who has been running Anson’s U.S. operations. Nathoo is a known braggard who likes to talk about how Anson conducts cross-border trades to avoid U.S. penalties, making him one of the key people for the DOJ to tap for information. Everything Anson has done in the U.S. has Nathoo’s fingerprints on it.

Laura Salvatori:
Anson’s in house counsel. Salvatori knows where all of the bodies are buried and is in very deep water over the Zenabis scandal.

Fraser Perring, Victory Research. Perring was employed by Anson Funds to write a continuous stream of libelous material about oil company Reconnaissance Energy Africa. This attack went on for months, and some sources estimate that Perring was personally paid more than $2 million by Anson Funds for his work. Perrings communications and accounts should be checked for payments from various offshore entities in the form of consulting fees.

Sunny Puri: Moez Kassam’s right-hand man.Puri is the mastermind behind the entire illegal operation. He is the one who comes up with the strategies to cause maximum damage. His specialty is not trading, research or the markets, but hit pieces and manipulation. He built out the network of short sellers and “fixers” to be used. He is loyal to Kassam but also has his eyes on the crown.

Greg McArthur – Globe & Mail journalist. Anson Funds go to guy for hit pieces on companies that are giving Moez problems. Greg has been paid in the past with pre-paid debit cards: https://www.theglobeandmail.com/authors/greg-mcarthur/

Winston Miles:  aka Trader Tony. Investigators should be closely reviewing Miles’ emails, phone messages and any other digital communication. He did a lot of dirty work for Anson funds. The BVI structures he set up need to be looked into.

Desjardines and kiting: The bank behind many past Anson trades

Anson used to do a high volume of business through Desjardines; however, that stopped abruptly several years ago when the IIROC fined the bank around $750,000 for allowing Anson to not declare and kite buyins. On this occasion, Anson moved $650 million of stock and Desjardines failed to make them put up exchange margin. For some reason, this fine and Anson’s involvement was hushed up by the Canadian regulators. They are moving positions from several firms all the time so you can never see the size of the position. When they get bought in or are informed they are about to be, they kite it to another firm and avoid the buy-in.
There is a more detailed description of what kiting is here: https://www.reddit.com/r/Superstonk/comments/sx2tka/the_shorts_never_covered_or_closed_kiting_a_hot/?utm_medium=android_app&utm_source=share

When a fund like Anson kites that means it is desperate and willing to pay way over the odds to do it. For example, if Anson paid 0.5% on the $650 million, the commission would be $3,250,000, along with other possible deal sweeteners offered by Anson. The firm receives a $750,000 fine, leaving a nice profit, even if they were not intending to be caught. However, the truth is that all Canadian firms know that if they are caught, the fine will be miniscule in relation to what they stand to make by taking these illegal trades.

Eight Capital: The brokerage that cut Anson off from naked shorting

Early last year, Eight Capital cut off Moez Kassam because doing business with him became too risky. Kassam was told that unless he could show he had a borrow in advance, he was not allowed to trade and not allowed to short with them, though prior to this he had done a significant amount of shorting through Eight Capital. DOJ should be speaking with Eight and all of the Anson related accounts held there and recently closed.

Anson Funds and the big banks

CIBC, RBC, TD, and National are the main banks that Anson uses. Certain employees at these firms allow Anson Funds to get away with the numerous financial crimes because of the huge commission and borrow fees they pay. Our sources have said that Anson is one of the biggest commission payers on Bay Street. The bank employees are knowingly involved in wash trading, naked short selling, mis-marking tickets, kiting and many other regulatory violations. While investigators should look into the Canadian banks, it’s important to understand that it is of no use to attempt to go to war with these banks over Anson Funds. The illegal aspect of this is not institutionalized; rather, at each there will be a couple of individuals involved and a compliance officer who is not up to the task.

The origins of Anson Funds profits

Profits and expenditures are key to investigating Anson Funds. Many illegal profits will have been disguised and routed through any number of corporations.

During one of the greatest bull markets the world has seen, and at a time when all other short funds were getting crushed, Anson Funds managed to outperform by 44%. This is not a case of Anson Funds picking better stocks than everyone else—it’s a case of not playing by the same rules.

This outperformance was generated by a few big trades–among them GSX Techedu and Facedrive—through short-and-distort schemes and illegal trading designed to destroy the companies in question. Unconfirmed rumors estimate that Moez Kassam made more than $80 million on GSX and over $40 million on Facedrive.

Sinister relations with short research firms

Anson has worked with most of the short report writers out there, including Hindenburg, Citron, Muddy Waters, Friendly Bear, Sprucepoint and many others.

Over the past eight months, those firms have proceeded with much more caution due to the DOJ investigation, which has cast a wide net that includes all of them.

Anson instigated a large number of the reports from these groups and participated with insider trading knowledge in many of those. Again, investigators should be looking at Anson’s position 1-2 months prior to the publication of these hit pieces and how they traded the stock through their main funds, LPs and affiliated corporations.

https://citronresearch.com/category/citron_reports/
https://www.sprucepointcap.com/research/
https://hindenburgresearch.com/

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 and created him.

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.

NexTech AR

Anson Funds also ran into trouble with NexTech AR. Other funds knew that Anson had a huge position that had run away from it so they started squeezing Kassam. Anson Funds’ solution to this growing problem was to persuade Nate Anderson to do a hit piece on the company. Anderson was only too happy to help for the compensation. Again, investigations should focus on Anson’s positions for up to two months prior to the publication of Hindenburg’s hit piece.
https://hindenburgresearch.com/nextech-ar/

Facedrive – The full story

We have covered Anson’s attacks on Facedrive here and here, and more details can be found on Reddit. But here is a full report on what really went down, how it all took place and more details on the illegal activity Anson engaged in.

In May 2020, Moez started shorting Facedrive. Facedrive had a small float and it is believed Anson shorted north of 10 million shares over the next few months. This should have been impossible as at the time the float was a little over 6 million shares. The shorting was done through RBC, CIBC, TD and National Bank. As the stock started to move away from Anson, the fund continued piling the pressure on the quote using counterfeit stock that the above Canadian banks created out of thin air. But this wasn’t enough, so they used sophisticated trading techniques such as spoofing, layering, wash trading, and manipulation, among other things. But even this failed to produce the results Anson need, prompting the fund to resort to their paid media bashers, propagating lies across all social media spectrums.

In one example among hundreds, “Donnie” on the Yahoo Finance chat room is show below talking down Facedrive and RECO, another huge short position for Anson:

Another Anson commenter also on Yahoo made thousands of comments on Facedrive. He didn’t even try to hide the fact that he was trying to damage the company and stock and admitted on numerous occasions he never owned any shares in the company. Click here to see a small number of his comments. (He made over 1,000 pages of comments)

What’s sad here is that they don’t even try to disguise their actions. Moez has repeatedly said that he has no respect or fear for the OSC and believes he can do whatever he pleases in Canada with impunity.

But none of the above was working for Anson so Moez turned to Hindenburg’s Nate Anderson for a hit piece. Again, Anderson was fed information by Kassam and no real research was conducted by Hindenburg. Kassam paid an undisclosed sum for a rushed report—the trail for which regulators should be looking among offshore structures and various third-party transactions. When a report of this nature is paid for, it is a legal requirement to disclose the details of the transaction, with Anderson did not. Kassam then let the short selling community know he had arranged for a Hindenburg hit piece to come out.

Below is a 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 Kassam as Facedrive had moved against him and his short was proving to be very painful. Kassam says to check back with him on Monday. Then on Monday, the share price of Facedrive started falling hard from its high because of the huge amount of paper that was created by short sellers in Anson’s syndicate getting ready for a big short report to come out. Shortly afterwards, Kassam asks the person on the other end whether he is “loaded up”. He responds in the affirmative, with 10,000 shares and asks if tomorrow is good (for the short report being published). But the conversation does not end there: Moez then asks if he sees anything from the big boys. On July 23rd, Hindenburg putsout a very aggressive and negative report. Kassam knows a hit piece is coming out on Facedrive as he put the whole thing together and is trying to get other traders to short the stock ahead of time. This is insider trading and investigators would gain much information from Kassam’s phone records. (You only need to loot at trading volumes the few days before the report came out to see there is insider trading).

According to sources involved in the Hindenburg report, Kassam lied to the banks, telling them that he had a large part of a prior placement at $9, which would have meant he was illegally selling stock he already owned. Instead, the sources said, he had failed to get his hands on a single share of FD. This has been confirmed with discussions with the company. Anson Funds was selling naked short.

One example below of how the banks illegally helped Anson Funds with the Facedrive short is documented on the morning of July 24th, 2021, when TD put an offer up of 75,000 shares of FD at $14.16 (all out in the open). However, this was not a real order. The order was placed explicitly to spoof the market. Two minutes before the market opened, it was pulled as a favor to Kassam. 

Spoofing is a scheme Anson Funds has often used to manipulate the market into thinking there was a large seller nearby. This was done multiple times a day for months on Facedrive stock. This evidence is easy to find.

The manipulation of FD stock did not stop there. The Globe & Mail, which is known throughout the financial markets as an Anson Fund mouthpiece, published numerous hit pieces on Facedrive. The impact was minimal, but it did manage to create uncertainty and prompt funds to lean on the stock.

https://www.theglobeandmail.com/business/article-ride-sharing-company-facedrive-faces-questions-as-its-shares-whipsaw/
https://www.theglobeandmail.com/business/article-how-did-facedrive-a-tiny-canadian-tech-startup-become-a-multibillion/ 
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-fridays-insider-report-selling-action-continues-in-this-large-cap/
https://www.theglobeandmail.com/business/article-facedrive-bought-covid-19-devices-from-china-as-ontario-government/
https://www.theglobeandmail.com/business/article-facedrive-insiders-sell-holdings-as-companys-share-price-sink/
https://www.theglobeandmail.com/business/article-public-battle-between-facedrive-co-founders-heats-up-as-one-claims-the/
https://www.theglobeandmail.com/business/article-facedrive-execs-depart-in-shakeup-as-tech-startups-shares-plummet/
https://www.theglobeandmail.com/business/article-burned-investors-pump-and-dump-experience-raises-questions-about-iiroc/ 

Globe & Mail journalists Greg Macarthur, Mark Rendell and Niall McGee are known on the street to be corrupt and completely in Anson’s pocket and most of their research on these companies is provided by Anson Funds. Additionally, another journalist from the Globe & Mail, has reached out to a number of people promising anonymity if they shared information they had on Anson Funds. This journalist is then believed to have passed all this information to Greg Macarthur and Mark Rendell who forwarded it to Moez Kassam. We don’t have this journalists name, but once obtained we will be updating the report.

Brand Hiijacking

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 Nate Anderson for brand hijacking and intentional damage to their business and reputation.

NAV Manipulation on Facedrive position

Anson Funds has also been involved in NAV manipulation to defraud unitholders and potential investors.

A post on the 30th April 2021 on Reddit, which was removed due to Anson Funds threatening legal action against Reddit, shows the type of manipulation Anson Funds engages in.
The post was archived here so you can see it in full: https://web.archive.org/web/20210430151953/https:/www.reddit.com/r/BurnedByAnsonFunds/comments/n1w2al/illegal_trades_in_facedrive_this_morning_by_anson/

The post draws attention to the bizarre internal pre-market cross at Mackie research (83) Friday morning which involved Facedrive and two institutional accounts. The broker at Mackie who did these trades was Diana Blake. According to one of the traders who spoke with us, an institutional account set up a terms trade for FD at a steep discount before the open. Although this is a feature that the exchange offers, very few investors are even aware of its existence. Given that the terms market allows for a trade to have a customized settlement and price, it opens the gate for tremendous abuse because of its characteristics. When these trades are requested there is little to no vetting by compliance, thereby allowing institutions and sophisticated investors to move stock around the normal market. This is particularly useful for short trades as the seller has the ability to show the house that a pending buy/sell is in the system awaiting settlement. This can help create the needed room or time for these accounts to avoid buyins. This is also a feature that could help create a synthetic loan of stock on a deferred basis.

This particular trade seems interesting as it was more likely utilized for some sort of NAV manipulation for month-end, which means that Anson could have been illegally re-marking positions. This is done to fool potential investors and current unitholders.

Facedrives stock has been destroyed by this constant pressure over years. A small company cannot compete with the endless illegal practices these funds take against companies: the ability to print limitless amounts of stock, spread rumors, engage journalists write non-stop negative pieces, and utilize sophisticated illegal trading techniques.

There is more information on Anson Funds and its manipulation of Facedrive stock here: https://www.reddit.com/r/BurnedByAnsonFunds/

We would like to close with a comment Moez recently made to another fund manager, “Facedrive put up a good fight and they won a few battles but we won the war”. The intent was there to always destroy the company.

Popular with press, Globe & Mail and Greg MaCarthur

This whole story is gathering huge press attention with the world’s most important publications covering the story: Bloomberg, Reuters, Wall Street Journal, Financial Times, Barrons, Forbes, New York Times,   Business Insider and many other major publications. This story is gathering steam and Anson Funds is moving further into the spotlight every day.
 
One aspect that the media have gotten wrong so far is the focus on Citron’s Andrew Left and Muddy Waters. Both were only small players in the criminal syndicate. The mastermind and main beneficiary was always Anson Funds. GSX Techedu is the perfect example of how Anson Funds used the report writers to achieve its goals. Since the DOJ investigation has come to light in mainstream media, Canada’s Globe & Mail has gone silent. None of the publication’s business reporters have covered the fact that a Toronto-based hedge fund is ensnared in this investigation.

The reasons for the Globe & Mail’s silence, however, are clear: 

  1. Greg McArthur, one of the Globe’s top sleuth’s, is known for taking on public figures. What is less known is that he works for Moez Kassam of Anson Funds. Recently seen at an Anson event, Greg denies having anything to do with the firm; yet, whenever Anson needs a hit piece written on a company, McArthur has helped them out, either directly or through one of his trusted colleagues, Mark Rendell or Niall McGee. This corruption has been documented here, here and here.

    Greg is currently attacking Ninepoint for Anson as they have a number of short positions in their various funds and like a good employee, Greg is doing as he is told: https://www.theglobeandmail.com/business/streetwise/article-private-debt-manager-ninepoint-freezes-investor-redemptions-on-four/

  2. A source close to the publication recently told us that McArthur and his colleagues were working on a piece meant to damage a number of Anson Funds’ enemies (people who stand up to them) https://marketfrauds.to/corruption-at-globe-and-mail-mail-sent-to-their-staff-and-regulators/

Abuse of the whistleblower system

Anson Funds abuses the whistleblower system to the fullest extent. The whistleblower system is there to help bring to light fraud and financial crimes; however, Anson and members of its syndicate manipulate the system to their own advantage. This was first brought to light in the Catalyst lawsuit against Anson, and the same playbook has been used for most of the companies they attack. The modus operandi is for Anson to write a list of unsubstantiated complaints and half-truths to regulators in the U.S. and Canada and then leak those complaints to one of the corrupt journalists in their pay and the short report writers. This then finds its way into the press and the shorts cover it. It is also the basis for law firms to get involved and launch baseless class action lawsuits. A perfect example of this was with the oil company RECO.

Anson also manipulates complaints to regulators and exchanges with an entire network of people paid to submit complaints in the U.S. and Canada. These complaints attach people within the targeted companies and other firms. They use employees, relatives, and journalists. An informant within Anson Funds revealed that Globe journalist Greg McArthur has submitted complaints for Anson in the past.

They have been known to submit up to 50 complaints in a day, with the aim of getting regulators to start asking the company questions and spook investors. Nine times out of ten, this will not lead anywhere, but it does put the company on the back foot and somehow news that the regulators are asking questions is always leaked to journalists.

Anson people for regulators to contact

A number of people in Anson Funds back office can help authorities understand more about payments, where they went and who they went to. They know all of the balance sheet partners:
Katy Hackett
Tony Moore
Scott Arbuckle

Marc Cohodes is helping expose funds and short sellers

Marc Cohodes has recently come over to the light and has been exposing his one-time colleagues for the corrupt criminals they are.

The full quote says the following: The”Dirty Little Secret” that I will address in my letter to the SEC are the “balance sheet arrangements” amongst “the players” which need to be disclosed. I can’t wait till one of these “Activists” get popped by the SEC. “Marc we need to put food on the table, how else can we do it?”

The post can be found here: https://twitter.com/AlderLaneeggs/status/1397638209979355136

I don’t see any disclosures on Citron, Sprucepoint or Hindenburg reports that they are being rewarded for writing these pieces – maybe they forgot to mention this.

Ongoing hacking by Anson Funds:

Our website has come under sustained attack by Anson Funds and their paid hackers.
We have evidence of their cyber crimes listed here and are very happy to send all proof to authorities should they request it: https://marketfrauds.to/intelligence-briefing-anson-funds-active-cyber-crime/

Here is a recent post by one of their people calling for hackers help them to take control of the website:

Here is evidence of their varied attacks coming in that are trying to hijack username and password as was mentioned in the post on the hacking forum:

Below is just how many attacks the website is dealing with, chosen from a random day last week:.
16 million bots attacking the site every hour. We are looking at 384 million+ attacks every day. This is enough to take Linkedin down.

Here is a look at the complex attacks coming at the website, which include SYN floods, fragmented packet attacks, Ping of Death, Smurf DDoS and more. This type of attack consumes actual server resources, or those of intermediate communication equipment, such as firewalls and load balancers, and is measured in packets per second (Pps)
As you can see in February there are over 41,000 devices attacking at any one time on average and each device can have thousands of slaved bots attacking alongside.

Regular companies do not stand a chance against these criminals. Their operation is too sophisticated and rooted into the system. They have spent over a decade building this criminal enterprise and alongside corrupt journalists, market manipulation, bullying and fraud they are always one step ahead of authorities.

But time is running out. The world now knows more about Anson Funds crimes and it’s only a matter of time before the DOJ help bring this team of career criminals to justice.

Please keep Marketfrauds.to bookmarked as we have a new report coming out next week. One the regulators will be very keen to read.

Exit mobile version