Hindenburg Research accused Dorsey’s payments company Block of skirting banking laws and helping clients take advantage of COVID stimulus payments.
Block released a statement on Thursday denying the allegations and vowing to take legal action against Hindenburg.The company called the report “factually inaccurate and misleading” and said it will work with the Securities and Exchange Commission to explore legal action against Hindenburg.
Hindenburg said it conducted a two-year investigation which found that Block artificially inflated the number of registered customers that use its products. The short seller cited “dozens of interviews with former employees, partners, and industry experts, extensive review of regulatory and litigation records,” and Freedom of Information Act and public records requests.
According to Hindenburg, Block “obfuscates” the actual number of people using CashApp by repotting “misleading…metrics filled with fake and duplicate accounts.”in the world, prompted a massive sell-off of his company’s stock. Hindenburg Research said it was selling Block stock short after it learned the company was allegedly facilitating fraud.
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