Nathan Anderson — the notorious US short seller who leapt to prominence with a report two years ago that accused the Gautam Adani-led conglomerate of stock manipulation and accounting shenanigans — has decided to disband his firm, Hindenburg Research.

The shock announcement late on Wednesday comes just four days before President-elect Donald Trump’s inauguration amid speculation — with no real confirmation — that the two events might be linked.

Anderson insisted in a letter posted on the Hindenburg website that there was “no particular threat, no health issue and no big personal issue” that had triggered his decision to pull the plug on his research firm that apparently made oodles of money by driving down the stock prices of the companies that he targeted.

The Adani group did not comment on the development. But group CFO Jugeshinder Robbie Singh made a cryptic comment on X: “Kitne Ghazi Aaye, Kitne Ghazi Gaye (Many warriors have come, and many have gone)."

Anderson and Hindenburg have been slammed for profiting through short selling — a trading gambit that involves selling shares that one doesn’t possess, certain in the belief that the prices will fall after its hatchet job on corporations and their chieftains. The short sellers make big gains when they settle their sell positions at the end of the contract.

Anderson had set up Hindenburg Research in 2017 and, for a time, submitted whistle-blower reports to the market regulator. But it did not make enough money from the US Securities and Exchange Commission’s (SEC) reward system.

“I now view Hindenburg as a chapter in my life, not a central thing that defines me,” Anderson said, adding that he would share the details of its current investigations into “Ponzi cases” with the regulators.

Anderson clarified that the firm’s closure was not prompted by external threats but was a planned outcome after completing its “pipeline of ideas”.

Over its eight-year tenure, the firm gained notoriety for its critical reports on major companies, including auto giant Nikola, Clover Health, the Adani group and IcahnEnterprises.

Meltdown and profits

The Hindenburg report had sparked a meltdown in the Adani group stocks. At one point in February 2023, the combined market valuation of the Adani group’s listed companies had swooned by almost $150 billion.

Hindenburg had earlier claimed that it made just over $4 million in profits from its short positions in Adani stocks. However, the firm did not publicly disclose the exact details of the securities it had shorted within the Adani group.

The Securities and Exchange Board of India (Sebi) had initiated an inquiry into Hindenburg’s accusations against the Adani group. The final report on the probe has yet to be submitted to the Supreme Court.

“Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs,” Anderson wrote in his note. “We shook some empires that we felt needed shaking.”

According to information on the firm’s website, Hindenburg’s investigations resulted in 65 individuals being charged by the SEC, while 24 others faced federal criminal charges from the US justice department.

Anderson said that over the next six months, he intended to work on a series of videos and prepare materials on Hindenburg’s model so that others could learn how the firm conducted investigations.

“For now, I will be focused on making sure everyone on our team lands where they want to be next,” he said.

Showcause

In June last year, Sebi had sent a 46-page showcause notice to Hindenburg for violating its rules by trying to profit from short selling positions that it had taken before coming out with its damning report against the Adani group.

The US short seller had ripped into Sebi’s notice which, it said, was “concocted to serve a pre-ordained purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India”.

It then went on to accuse Sebi of trying to protect Uday Kotak and Kotak Bank by failing to explicitly name them in the notice.

It stirred controversy by saying that “Kotak Bank, one of India’s largest banks and brokerage firms founded by Uday Kotak,… created and oversaw the offshore fund structure used by our investor partner to bet against Adani”.

Veteran investor Ajay Bagga wrote on X that Hindenburg Research operated in a grey zone, publishing negative reports and taking short positions via hedge funds that did not disclose their positions.

“Short sellers hardly ever make sustained profits. That is why the few who do… are celebrated so much. The rest make hardly any returns over the long term. Some regulatory action may have taken place and a way to skip penalties may be an agreement to quietly shut down. Hope they get prosecuted and are not let off so easily in case some regulatory or legal action is ongoing against them,” Bagga observed.

“This was no altruistic, ‘truth-seeking’ endeavour; it was a model to benefit from issuing scathing reports against companies and promoters and simultaneously shorting them in advance of the release of these damaging reports. Won’t be missed,” Bagga added.