FRHC - DOJ is investigating former Russian citizen's Freedom Holding

2023-10-06 12:31:05 ET

Freedom Holding Corp (NASDAQ: FRHC) is in focus today following a report that it is being investigated by the U.S. Department of Justice.

Why is Freedom Holding being investigated?

The Kazakh financial firm is majority-owned by Timur Turlov – its Chief Executive and a former Russian citizen.

It has already been under investigation by the Securities & Exchange Commission for months. Both agencies are scrutinising Freedom Holding over its offshore operations, insider stock moves, and compliance issues.

The probe is also related to its claims that it can enable Russian clients to access U.S. IPOs, as per CNBC.

Freedom Holding ended its latest reported financial year with close to $800 million in revenue. Its shares are still up more than 45% versus the start of 2023.

Short sellers have been after Freedom Holding

Note that Freedom Holding has been a target for short sellers in recent months. Hindenburg Research , for example, blasted the investment conglomerate in its recent report for fabricating revenue making its stock tumble 17% in about three weeks.

The activist short seller also slammed Freedom Holding for doing business in Russia and evading “sanctions along with anti-money laundering and know-your-customers rules.”

While the Securities & Exchange Commission has been investigating the Kazakh firm for months, the Justice Department has gotten involved more recently.

Nonetheless, it is worth mentioning that such probs do not always lead to charges. Both Freedom Holding and the DOJ refused to comment on the CNBC report today.

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