Freedom Holding (NASDAQ:FRHC) stock is slipping on Wednesday after the company’s shares were the target of a Hindenburg Research short report.
The new report from Hindenburg Research alleges several problems with Freedom Holding. That includes Chairman and CEO Timur Turlov holding 70% of the company’s shares, which he’s done since it was created.
Hindenburg Research also points to a series of red flags investors should keep in mind about the brokerage company. Among these are its claims that Freedom Holding avoids sanctions, shows signs of fake revenue, blends customer funds, gambles assets in levered, illiquid bets, and has signs of market manipulation.
According to Hindenburg Research, these problems are worth pointing out as FRHC stock has seen massive gains since going public in 2019. The stock has rocketed 450% since then, which the firm claims draws in investors that aren’t aware of these red flags.
A former senior executive at Freedom Holding said the following to Hindenburg Research about its know your customer (KYC) and anti-money laundering (AML) checks.
“Literally nothing. Just bring your money. There’s no source of income, source of funds. There’s no KYC. Nothing. The best part is this is violating almost every country’s anti-money and anti-terrorist financing laws. They could bring cash. I’ve personally seen suitcases with $2.5 million brought in cash by a client.”
FRHC Stock Movement
Following this short report, shares of the retail brokerage services company’s stock are seeing heavy trading. That has more than 650,000 shares changing hands as of this writing. To put that in perspective, the company’s daily average trading volume is closer to 160,000 shares.
FRHC stock is down 1.7% as of Wednesday morning but is still up 24.9% year-to-date.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
