Brazilian fintech XP has filed a lawsuit in a US court accusing Grizzly Research of defamation after the short seller alleged in March that XP operated a “Madoff-like Ponzi scheme”, Reuters reported.
The complaint, lodged on Monday in Manhattan federal court, claims the report caused over $100mn in damage to XP’s business and reputation, leading clients and partners to withdraw funds.
XP said Grizzly and its owner Siegfried Eggert acted “brazenly, maliciously and recklessly” to depress XP’s share price for profit through short selling.
Grizzly did not respond to calls or emails after hours, and its website did not accept messages. XP’s press office in Brazil declined to comment.
In its report, Grizzly accused XP of using derivatives sales to retail clients, channelling proceeds through special funds and falsely reporting trading profits. Grizzly said this structure was “likely to involve nefarious activities” and claimed XP would not be profitable otherwise.
XP called the allegations “demonstrably false”, saying its Gladius and Coliseu funds are proprietary with no outside investors, and that all transactions followed Brazilian regulations.
XP’s shares fell 5.5% on the day of the report’s release and closed at $19.48 on Monday. The lawsuit seeks unspecified damages.
Related Articles
Brazil to require fintechs to report customer data
Brazil’s Federal Revenue Service will issue a new normative instruction requiring fintech companies to submit the same financial information currently provided by ... more
Banco do Brasil asks AGU to act on fake news over bank stability
Banco do Brasil has asked Brazil’s Attorney General’s Office to act against the spread of false information on social media, warning that the material could trigger ... more
Brazil’s BNDES adds $1.85bn credit for firms hit by US tariffs
Brazil’s National Bank for Economic and Social Development (BNDES) said it will provide an additional BRL10bn ($1.85bn) in credit to companies hit by the 50% tariff ... more
Most Read
-
Kyrgyzstan abandons attempt to rescue Russian climber trapped on icy summit of country’s highest mountain
5 days ago
-
BERTRAND: China after Communism, preparing for a post-CCP China
1 month ago
-
BERTRAND: China now accounts for 64% of world’s renewable energy output
4 months ago
-
UKRAINE REMONT: The battle to build: signs of recovery in Ukraine's construction industry
4 months ago