In a David and Goliath battle, education-tech company Genius Group Ltd GNS is taking on short-selling giants.
What Happened: Earlier this month, law firms conducted a probe and found that certain individuals or companies sold a “significant” amount of Genius Group stock but did not deliver it — which is illegal.
The Singapore-based company said it appears to be “part of a market manipulation scheme seeking to artificially depress the price of the securities of the company.”
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Genius Group CEO Roger Hamilton is leading the charge, armed with a board-approved action plan and a task force of heavy hitters, including a former Deputy Director of the FBI.
“We have a fiduciary duty to our shareholders to protect value,” Hamilton said Monday on Benzinga TV. “We are obligated by the SEC to have a committee in the actual company to do internal audits and make sure there’s no internal fraud — but, there’s no responsibility to do the same for external fraud, and that could be much bigger.”
“The rule really needs to change on that,” he said.
Hamilton, who was recently vocal about the issue with MarketWatch, compares the illegal naked short selling to "being robbed in a library, but you can’t shout ‘Thief!’ because there are ‘Silence, please’ signs everywhere."
He told Benzinga that the company is pursuing damages via legal action after it used Share Intel over the course of December to track its shares.
The company tracked where naked shorts were taking place, and where their counterfeit shares were being shorted.
“We’re throwing everything at this,” he said.
Hamilton is not alone in his concern, he mentioned that over a dozen CEOs have reached out to him, and are beginning to speak out against naked short-selling.
Genius Group’s task force, led by Timothy Murphy and also featuring Richard Berman, will actively pursue all possible actions together with the regulators to uncover and prosecute those engaging in market manipulation involving Genius Group's shares.
The company has also been sharing information with government regulatory authorities.
Other high-profile CEOs such as Patrick Byrne and Elon Musk have also spoken out against naked short-selling in the past. Musk has commented on hedge funds using short selling and complex derivatives to take advantage of retail investors.
Price action: Shares of Genius Group are trading 22.5% higher to $3.97 at the time of writing, according to data from Benzinga Pro.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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