Citron Research Calls For 'Regulatory Intervention' Over Freedom Holdings' Business Practices

Citron Research is calling for U.S. regulators to look into serious concerns about the business practices of Freedom Holding Corp. FRHC, a financial services company.

Citron Research has criticized the company for its questionable IPO model, lack of oversight, and potential violation of sanctions, among other issues. In a tweet on Friday, the research firm called for regulatory intervention to maintain the integrity of the financial markets.

Freedom Holdings didn't immediately respond to Benzinga's request for comment.

Questionable Business Practices

Citron Research pointed to the company's potential acquisition of a U.S. brokerage firm, Maxim, and questioned why exchanges allow companies with questionable practices to trade. As Citron Research tweeted, "Freedom Holdings' potential acquisition of a US brokerage firm in Maxim is perplexing, considering their failure to file a 10k, repeated missed extension deadlines, the departure of their auditor, and sanctions and suspensions by the PCAOB for negligent oversight."

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Regulatory Concerns

Citron has also raised concerns about the company's potential violation of sanctions and related party transactions. Freedom Holdings' CEO, Timur Turlov, was put on the war sanctions list by Ukraine for financial support of the Russian Federation in October 2022, according to an April 19, 2023, Citron Research report. Despite this, Turlov has continued to operate FFIN Brokerage Services, a corporation registered in Belize, which is not part of Freedom Holdings but is personally owned by Turlov, the report added.

Citron Research expressed its concern in a tweet on Friday, stating, "While the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) are diligently investigating employees of US banks such as First Republic and Silicon Valley Bank for potential stock trading misconduct, it is disconcerting that the SEC and NASDAQ continue to permit Freedom Holdings ($FRHC) to trade freely."

Call for Transparency

Citron Research has called for Freedom Holdings to disclose any ongoing investigations by U.S. government agencies. The firm states that it finds it hard to believe that the Securities and Exchange Commission (SEC), Treasury, or Department of Justice (DOJ) have not initiated an investigation into the company. Citron maintains confidence in the regulatory system and suspects that Freedom Holdings might be withholding crucial information from its shareholders. As Citron Research tweeted, "It is imperative for the company to promptly disclose any ongoing investigations by US government agencies."

Citron Wants Investors To Be Protected

Given the numerous concerns surrounding Freedom Holdings, Citron Research has called for a thorough investigation into the company's practices. The firm hopes that the SEC and NASDAQ will take action to protect investors and maintain the integrity of the financial markets. "We need accountability and regulatory intervention to maintain the integrity of our financial markets," Citron tweeted.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.