Activist short-seller Nate Anderson, who has announced the closure of his eight-year-old research firm Hindenburg, is under suspicion for alleged ties with hedge funds, a Canadian portal reported, citing documents filed in an Ontario court. Short-seller Nate Anderson is said to be facing investigation for alleged ties with hedge funds in preparing reports targeting companies.

Documents filed in a defamation suit in Ontario's Superior Court of Justice show that Moez Kassam, the head of Canada's Anson hedge fund, has admitted that his company shared research with several sources, including Anderson. Hindenburg collaborated in preparing the report The Market Fraud Portal claimed that court documents show that Hindenburg collaborated with Anson in preparing the report. Such undisclosed collaboration in preparing a bearish report could potentially amount to securities fraud under US Securities and Exchange Commission (SEC) rules. Short sellers typically profit by borrowing and selling securities. They hope to buy them back at a lower price after a stock falls due to an important report. However, allegations of hedge fund involvement raise concerns, as they may place parallel bets, which can increase downward pressure on stock prices.