American Short Sellers Are Chasing Freedom Finance Shares

The company’s securities were attacked through public channels before they had been added to the MSCI index

On December 14, 2020, The Foundation for Financial Journalism (FFJ) website published an article written by Roderick Boyd called «Freedom Holding: After ‘Borat,’ the Silliest Kazakh Import of the Century.»

The article did not appear in the professional media and circulated only in anonymous Telegram channels and websites.

Freedom Holding Corp. refused to respond to the Kursiv edition’s request because as a public company it doesn’t think it is a good idea to comment on any opinions published by dubious sources.

As Kursiv found out, FFJ is not a serious media like Bloomberg, it’s just a community of authors who write about public companies. The vast majority of these authors, including Roderick Boyd, who wrote about Freedom Holding Corp., shares only negative thoughts and misjudgment.

According to Boyd, shares of Freedom Holding Corp. or shares of any other company just can’t show steady growth amid the pandemic; he called this surge an anomaly. However, he didn’t notice those unique features of the market that we can see these days right in the middle of the COVID-19 pandemic. For example, Amazon stocks soared from $1,875 per share on January 3, 2020, to $3,236 per share on December 18 (73%); Zoom rose from $67 per share in early January 2020 to $559 per share in mid-October 2020 (730%).

Boyd blamed WSRP’s accountants, but he didn’t mention that this firm is a member of the U.S. Public Company Accounting Oversight Board (PCAOB), the body that manages, reviews and licenses accounting firms that audit American public companies. Moreover, WSRP is a member of the BDO Alliance – an international association of audit and consulting companies, the fifth auditing company in terms of weight after the Big Four. Indeed, the services of WSRP cost less than the services of Big Four by $1 or even $2 million, but it does it very thoroughly. Don’t forget, in the United Stated the activity of all audit firms is under strict supervision and control.

Boyd said that Freedom Holding Corp. might be cheating while not showing any evidence of wrongdoing. Kursiv has read his article and didn’t notice any specific charges that the company broke any law.

Boyd’s material is just a retelling of the open financial statements of FRHC which is available on the U.S. SEC website. For example, the FRHC’s broker from Belize was mentioned by Boyd and also mentioned on the SEC website. In other words, you can’t call this article an investigation because all this information is open and already published by the most powerful and trustworthy financial regulator in the world. And of course, all this data is the result of FRHC’s regular reports, including the data about the structure of the holding and its FFIN Brokerage Services company licensed in Belize.

According to SEC the FRHC’s revenue for FQ2 increased by 111% if compared to the last year; fee and commission income increased by 106%. Profit from trade securities rose 110%. Interest income grew by 174%. In the second quarter this year, the number of the company’s active clients increased from 152,000 to 195,000 with a rate of growth of +28% per quarter. Profit for six months of the fiscal year of 2021 is two times higher than the previous fiscal year.

The growth that FRHC has shown is typical for the industry these days – the world stock markets (including Kazakhstan and Russia) faced a massive influx of investors: many brokerage companies demonstrated record growth in their performance during the pandemic. For example, Tinkoff Investments in Russia continues to show rapid growth: the amount of clients’ assets has increased six times if compared to last year and the number of clients has exceeded 2.4 million.

Who is Boyd?

As the information available on the Internet shows, the author of the mentioned article, Roderick or ‘Roddy’ Boyd, has close ties with professional short-sellers. Usually, these people borrow and sell stocks at high prices. Then they launch a media campaign to make the stock prices fall and buy them at a lower price to make a profit. Often, these short sellers cooperate or work in groups. For example, they might be tied with broker-dealers, ‘dark’ journalists, and anonymous authors who write on the internet and create a negative attitude towards a specific company. Some of these kinds of actions might be considered securities fraud, which is illegal in the U.S. financial system.

After some research, Kursiv has found several allegations against Boyd who was blamed for participation in coordinated short-selling schemes and attacks against small public companies. In one case described in the article «Why Roddy Boyd’s Ethics Failure Matters – Fraud Files Forensic Accounting Blog,» Boyd extorted money from one public company and stopped only after being ‘gifted’ 5,000 shares. His fund sold these stocks immediately for $329,000.

Moreover, Boyd’s activity once was a subject of complaints to the U.S. Securities and Exchange Commission. For example, in 2007, SEC published a complaint about negative materials writtenby Boyd. The support of the short-selling scheme was mentioned as his prime goal. 

The consequences for FRHC stocks

On December 14, 2020 shares of Freedom Holding Corp. began to decline from $46.34 to $41 on the following day. During these two trading sessions, 3.8 million shares were traded, which is 3.8 times more than the average 15-day trading volume so far. On December 16, this trend was changed and now the company’s shares are traded about $46.5 – $43.9.

Despite Boyd’s article, shares of the FRHC are more expansive now than before the material was published. Basically, the company’s share price is high, indicating the market’s confidence and trust. 


The activities of all public companies in the United States are regulated by the U.S. Securities and Exchange Commission (SEC). The same mechanisms work in Russia (Central Bank) and Kazakhstan (National Bank) not to mention tax authorities in each of these countries.

Earlier, FRHC said that it complies with all legislative and regulatory schemes in six jurisdictions, takes into account currencies in the countries of presence, clearing and settlement regimes in the market, as well as rules and standards of the U.S. GAAP and IFRS. All documentation is maintained under SEC disclosure standards, and access to the files is supported in chronological order.

The company undergoes two audits: firstly, an American audit of financial statements by the rules of the PCAOB (Public Company Accounting Oversight Board (PCAOB) and GAAP and secondly, local audits for each company of the holding under the requirements of each jurisdiction. American audits and local audits are conducted by different auditing firms.

MSCI has included Freedom Holding Corp. to the MSCI U.S. Small Cap 1750 and MSCI U.S. Investable Market 2500 indexes. Among some other companies, the FRHC was added to the index after the November revision. MSCI U.S. Small Cap 1750 measures the performance of the small-cap segment. It was launched on March 27, 2003 and consists of 1,750 of the smallest companies in the broader U.S. Investable Market 2500 index.

Boyd’s article was published right after the inclusion of FRHC to the MSCI indexes, which has a positive impact on the value of securities and a negative one for short-sellers. At the same time, the situation is good for those who planned to buy shares for cheap and sell them later. In any case, it looks like an attempt to misuse financial data by some American insiders.

Today it was announced that Freedom Holding Corp. has acquired Prime Executions Inc. (USA, Delaware) registered with the U.S. Securities and Exchange Commission. This brokerage and dealer company is a member of the New York Stock Exchange (NYSE), NASDAQ, FINRA and SIPC. The deal was approved by Financial Institutions Regulatory Agency (FINRA) after Boyd’s article was already published. The American regulator did not take into account his reflections based on the FRHC’s reporting.

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