Freedom Holding, a Nasdaq-traded Kazakh financial firm controlled by billionaire CEO Timur Turlov, is facing investigations by federal prosecutors and the Securities and Exchange Commission (SEC) regarding compliance issues, insider stock trades, and affiliations with sanctioned individuals.
The SEC’s Boston regional office has been examining Freedom for several months, while the U.S. Attorney’s Office for Massachusetts has initiated preliminary inquiries. These investigations are focused on the firm’s internal controls, offshore operations, and Turlov’s claims of providing access to hot U.S. IPOs for its primarily Russian client base.
Some of the issues raised in these investigations were previously brought up in reports by short sellers, including Hindenburg Research and Citron Research, which alleged sanctions violations, anti-money laundering (AML) and know-your-customer (KYC) rule violations, and connections to sanctioned individuals.
Freedom has faced regulatory challenges in the past, including fines related to money laundering and anti-terrorist financing controls. The firm’s auditors have also faced scrutiny, and its former U.S. auditor, WSRP, was replaced by Deloitte Kazakhstan.
Turlov, who owns 71% of Freedom shares, worth approximately $3.6 billion, has denied any wrongdoing and referred to the investigations as stemming from “misinformation.” These probes may take years to conclude, and no formal charges have been filed as of now.
Freedom Holding has attempted to expand in the U.S. with acquisitions, including the agreement to purchase middle-market investment bank Maxim Group for $400 million. Turlov continues to engage with U.S. partners and regulators while the investigations are ongoing.
By FCCT Editorial Team
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