Digital payments company Block has been accused of misleading investors in a report put out by Hindenburg Research on Thursday, 23 March.
Driving the news: The short-seller said that it's betting on a decline in Block's share prices.
The report against Block was the result of a two-year-long investigation led by Hindenburg's founder Nathan Anderson.
It also mentions Indian-origin Amrita Ahuja, who holds the position of Chief Financial Officer in Block.
Ahuja has previously worked in companies like Morgan Stanley, McKinsey & Company, Fox Networks Group, etc.
She joined Block in 2019 as Chief Financial Officer, and became its Chief Operating Officer in February this year.
In a nutshell: Hindenburg broadly accused Block of a willingness to "facilitate fraud, avoid regulation & dress up predatory products as revolutionary tech."
The company "overstated genuine user counts and understated customer acquisition costs for years," Hindenburg alleged
Cash App, a peer-to-peer (P2P) payment app owned by Block, is allegedly rampant with "criminal activity and fraud."
It also alleges that Ahuja dumped millions of dollars in stocks during the pandemic
Twitter co-founder Jack Dorsey is the chairman of Block
The company was established in 2009 to offer payment and mobile banking services for merchants and consumers
Why it matters: Shares of Block slumped by 20 percent to $58.35 in New York in US pre-market trading, according to Bloomberg.
Flashback: In January, Hindenburg Research had accused Adani Group of carrying out an elaborate "con".
The billion-dollar conglomerate was accused of stock market manipulation and money laundering
Five trading days later, Gautam Adani's net worth had reduced by nearly $70 billion
The report had also led to the withdrawal of Adani Enterprises' Rs 20,000-crore FPO
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