The Dark Money Secretly Bankrolling Activist Short-Sellers — and the Insiders Trying to Expose It
Michelle Celarier, 30 November 2020
John Fichthorn had been in the hedge fund business for more than 20 years when a half-hour phone call with a stranger put him on high alert. In December 2017, Fichthorn — a veteran short-seller and the founder of hedge fund Dialectic Capital Management — had joined the board of a troubled small-cap company called Health Insurance Innovations. But when he happened to mention its name to a prospective investor a year later, the man told him an alarming detail.
“There’s a multibillion-dollar fund out there going around with a short report trying to pay people to publish it on their behalf,” Fichthorn recalls the man saying.
“He was very nervous about telling me any of this,” says Fichthorn. Short-sellers soon began pounding the stock, so he called the man back and says he finally convinced him to provide the alleged name behind the offer. According to Fichthorn, that name was a Hong Kong-based hedge fund.
