Freedom Holding Corp FRHC, a Kazakh financial services firm, is currently under investigation by U.S. Department of Justice and the Securities and Exchange Commission for issues related to compliance, insider stock moves and associations with sanctioned individuals.
A report by CNBC revealed the ongoing investigations for this company valued at a $5 billion market cap.
These developments have also been linked to an ongoing probe into the company's CEO Timur Turlov and its offshore operations.
Turlov owns most of the company and has been pivotal in its growth, especially in Central Asia and Eastern Europe.
The SEC's Boston regional office has been examining the firm's internal controls and Turlov's claims regarding access to U.S. IPOs for its Russian client base.
Although Freedom and Turlov knew of the SEC's months-long investigation, the U.S. Attorney's Office for Massachusetts recently joined the fray.
Issues that attracted investigators' attention include allegations of sanctions violations and IPO access, previously highlighted by short-seller Hindenburg Research. Law firms are investigating claims of potential securities law violations following Hindenburg's allegations.
The trading activity of Freedom's stock, which moved to the Nasdaq in 2019, is also on U.S. authorities' radar. Despite backlash from negative reports by established short sellers, Freedom's shares have displayed resilience.
Freedom is not retreating amidst the probes. The company recently agreed to a $400 million deal for the middle-market investment bank Maxim Group.
FRHC Price Action: Freedom Holding shares are down 2.71% at $82.80 on the last check Friday.
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