US investment group Hindenburg Research on Thursday, After accusing India’s Adani Enterprises of fraud, undertook a new storm this time against Jack Dorsey’s mobile payments firm Block, saying it “widely stretched” its user ground.
Following the publication of the report, Block’s stock plunged up to 22 percent in earlier trading on Wall Street before regaining barely.
In late January, Hindenburg accused the empire Adani of price manipulation, accounting malpractice, tax evasion, and money laundering.
The allegations forced the value of its seven listed companies to plunge by tens of billions of dollars. But later Adani denied the allegations
Block, founded by former Twitter boss Dorsey in 2009, used to be called Square before being renamed in late 2021. The tech company operates financial transactions, ranging from payments to merchants to payments between individuals. Block, which owns the mobile app Cash App, has been expanding at a breakneck speed and topped $100 billion in market value in 2021. It is currently worth $38 billion.
Hindenburg said that the Block knew that many of its accounts were fraudulent or belonged to the same user but failed to account for this in its financial disclosure.
It charged Block of taking a “Wild West” approach to regulatory compliance, which “made it easy for bad actors to mass-create accounts for identity scam and other frauds, then pull looted funds quickly.”
Hindenburg said it investigated Block for two years and questioned dozens of former employees and experts, and conducted detailed research of documents from regulators and court proceedings.
