Turkish Magician Built a $600M Nasdaq-Listed Scam Based on Lies
hindenburgresearch.com
hindenburgresearch.com
[0]: https://seekingalpha.com/article/4307809-enochian-bioscience...
That's a feature, not a bug, and generally true in any country.
If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull. That will not do.
Yes. Most of the corruption stats are measuring “perception” of corruption and they are also using the traditional, blatant meaning of corruption where money is exchanged for favours.
But corruption in the West have evolved to be much more subtle and essentially impossible to catch (at least without major reforms). And as you said, they hold the power to fix this :)
It's just the way things are done there, and it's so entrenched that people cannot step back and see it rationally. Unless they are, say, from a country where the corruption has taken on a different form, or from Mars.
Yea no - if they were more funded and staffed they would audit you and other small players - big players leverage connections to dodge stuff like this all the time.
Are they catching the biggest Panama-paper level players? No those people have too much sway. But they can be very effective against the “ordinary” rich people.
There is evidence that they wouldn't use the resources in the public interest: since we know that the NSA is well funded with a budget that isn't up to public inspection and it has used its surveillance powers for the fulfillment of its staff's prurient interests.
"We just don't have a way to solve this via authority" is also a possible answer.
It's fundamentally a question of scalability: Asking a regulator to protect everyone just doesn't scale, in anything but the most draconian police state there will always be more crooks than regulators (and in a police state the crooks become police). So the primary defense must always be an individual and personal responsibility, as irritating as that is. The regulator then exists to backstop people's personal protection, dealing with what slips through and helping to keep the personal costs tolerable.
Doesn't mean that our regulators couldn't do better. I think they could. But there is only so much you can expect via regulator and law enforcement action.
Once regulators were correctly funded and staffed, they would become the rich and powerfull.
You know what a time honored way to make dysfunction worse is? Add money.
The incentives in these organizations are set up all wrong for delivering "good for society" outcomes beyond some local minimum of catching the smallest fish. Money won't change that.
Look what happens when you put white collar crime on a "bad neighborhood" map:
https://whitecollar.thenewinquiry.com
A mugger will take your wallet. Those people will take your life savings.
It is better to have NO regulation and have people know they need to look out for themselves, then to have the fake supervision that we have.
I'm not sure SeekingAlpha is viewed as a formal journalistic channel. It's the equivalent of Medium where amateurs can participate, too.
How do you define who is an "amateur" vs "professional" journalist? And what makes the latter more likely to tell the truth than the former?
There are likely articles written about every legit investment as fraud with some set of numbers to back them up.
If you look hard enough there is "proof" that the usd dollar is a scam, which I think we can all agree is not true.
I doubt regulators can investigate every potential fraud and instead have to be wise where they allocate their limited resources.
This is an unfortunate case of that system not working, but I think that the system works enough that we can be sure 95% of listed companies are not fraudulent.
Are you not able to read an article and discern that it could be plausible versus nonsense?
>If you look hard enough there is "proof" that the usd dollar is a scam, which I think we can all agree is not true.
Oh, you can. I don't understand the premise of your argument here, then. I expect the same ability from our regulators.
>but I think that the system works enough that we can be sure 95% of listed companies are not fraudulent.
What do you mean by "are not fraudulent"? You mean aren't complete scams? Sure, but I think that's a low bar. I believe far more companies are committing fraud than 5%, though they wouldn't be considered outright fraudulent companies.
That said, this is a great example that huge returns in the equity markets are possible if you're willing to do the work. If you read about a stock in Bloomberg you're months too late. It's the smaller edge cases where the price discovery goes all out of wack.
Wow... that's... interesting. Did their lawyers sign off on that?
Purchasing a fake degree most likely isn't a crime (passing it off as a real one most likely is, perhaps depending on context).
Exporting a piece of paper from Russia is also probably OK, even with the sanctions? You'd want to be sure you didn't pay any sanctioned people, but that's probably not that hard. I imagine that the hard part might mostly be that the usual obvious shipping services aren't usable now if they've ceased operations in Russia.
The person in question seems to have some footprint in Turkish media too, presented as the genius Turkish doctor doing cutting edge research in the USA. These people often exploit the patriotic feelings of the people. Any questioning of their claims is viewed as treason by the wider public, so they are usually immune of scrutiny up until the money dries out and someone starts screaming "where is my money".
Yes, in 2022 we have reached a point where the low-bar for being a youtube "financial influencer" is literally lacking a college degree but having experience as a magician.
Interesting to see the scams play out in real time. To be clear it looks like bots on his channel not something he is actually promoting. His content seemed not that bad? Extremely clickbaity for sure.
Also, lol @ the comments: https://amazonwt.com/js/ytc-settings.js
... actually, when I think about that, I believe those scammers are German, IMO. They used the word "commis" for comments, which kinda looks like a false friend from the german netspeak "Kommis". They also have a german comment in there, "Geht das echt" (=> "Does this work", very non-ML, native speaker translation), no other non-english language. Mhh.
Well magics got him very far all right... I guess it's where he learned how to manipulate people and get their trust. Although I also imagine, there are more people that didn't fall for his tricks than the ones who did, but the few of them that did fall for his scams were rich enough to provide him with a luxury life style, that guy is still a millionaire.
I mean exploiting desperate people with cancer with a bullshit cure, at a premium, what a complete sociopath, no wonder it escalated to murder...
I find it absolutely crazy how easy it was for that guy to relocate in USA despite being wanted in Turkey, especially after 9/11, in that little time. When I see how hard it is for people who are trying to get a greencard legally...
I was under the impression that the US specifically wanted to host certain Turks as a sort of "what if the balance of power in Turkey shifts?" foreign policy strategy. Gülen's been here since 1999. Being wanted in Turkey is obviously not an obstacle; that's the reason we let them in.
https://www.bloomberg.com/news/articles/2022-06-01/jpmorgan-...
https://www.investopedia.com/terms/e/efficientmarkethypothes...
> "Dr. Serhat recently presented his research findings at the 2021 Conference on Retroviruses and Opportunistic Infections (CROI), regarded in the medical research community as the leading HIV and viral research conference in the world. His Hijack RNA treatment method is an elegant scientific approach that highlights his signature creativity for addressing these treatable, but incurable illnesses," says Dr. W. David Hardy, Adjunct Clinical Professor of Medicine at The Keck School of Medicine at USC. "This strategy beautifully reflects Dr. Serhat's exceptionally keen understanding of how viruses work."
[0] https://www.prnewswire.com/news-releases/la-based-research-s...
Intelligence and education are no defense against these passions overwhelming our brain's executive function.
Hardy is in on the scam. He's a paid medical advisor to the company. His job is to trade his credibility for investor dollars.
https://seraphinstitute.org/team/david-hardy-md/
He's apparently 60+ years old, despite using a younger looking photo. Retirement-age, cashing out his credibility for a chance at one big score.
Back on 2021 a different org called out Enochian/Hardy's fraud:
https://www.treatmentactiongroup.org/cure/media-monitor/stor...
Arguably, Hindenburg is providing a useful service in funding speculative research and then educating the marketplace when they discover a significant value disparity. While Hindenburg is often correct, just keep in mind what they publish isn't from a neutral POV.
It is impossible to reconcile "put your money where your mouth is" with "wait and now you have a conflict of interest!?"
> "just keep in mind what they publish isn't from a neutral POV"
even as a mere FYI disclaimer on their behalf, they already have their own disclaimer, twice
> Initial Disclosure: After extensive research, we have taken a short position in shares of Enochian Biosciences, Inc. (NASDAQ:ENOB). This report represents our opinion, and we encourage every reader to do their own due diligence.
Good to know, my priors as to its accuracy went way up.
You can go to prison for lying to make money, you know. It's not civil like libel, it's fraud.
This might have happened before with a different short selling institution in 2019 when an investigator working with a hedge fund published a report accusing GE of accounting fraud[1]. The accusations led nowhere and GE's stock rebounded rapidly after an initial ~10% drop. I couldn't find details on who the fund was or if they made money cashing out on the dip.
I don't think that's what Hindenburg is doing here, and they have a pretty good track record of spotting fraud (IIRC they've called it correctly on a lot of bad companies in the past few years).
[1]https://en.wikipedia.org/wiki/Harry_Markopolos#2019_General_...
Give the podcast Wolfpack Research a listen, starting with Episode 15 -- "Kurt Feshbach".
Not quite. They bet money that they could convince other investors it was true. Big difference.
1) they say so, in sizeable font, at the bottom of the article
2) they called very well that Musk would try to back out or get a better price on Twitter; they are often correct
(A quick Web search for 'enochian magic' will clarify the references)
Or is there no volume and price is wash trading?
Second you can’t get a borrow or it’s super expensive so there’s no marginal seller…until random retail investors or insiders bail…
Who knows what the algos, market makers, and stock promoters are doing with the stock, but a bunch of wash sales
I was scrutinized in deep before being hired by my company, but it seems that people are raising millions just grabbing miracle without any kind of verifications.
Why the system is so vulnerable to con men and snake oil sellers?
Not only some people within the company questioned the magician's credentials but were fired for doing so and these people were subsequently harassed by the company itself to make them keep their mouth shut, in order to protect the "reputation" of the scammer.
To me it seems like some higher ups were complicit...
> Enochian’s former CFO is currently embroiled in an undisclosed lawsuit with Enochian’s leadership, claiming he was fired for asking “critical questions” about “serious financial improprieties” and large payments to Gumrukcu, and for questioning the company’s close association with an individual accused of numerous felonies.
So many redflags...
Redflags start with the history of the founder. If the VC asks about a PhD proof, the credibility of the founder will be destroyed.
The funny things is that those scanners (as sociopathic narcissistic) know very well how to hide that with foggy and not verificable experiences.
Sometimes I am thinking to found a startup that can verify the con men bullshit as a service
Investors literally don't care about red flags:
https://www.vox.com/recode/23142106/adam-neumann-crypto-carb...
Basically, investing in scams can be a great way to profit off the scam without incurring the legal costs when it's discovered. Of course, you still have to be careful not to be left holding the bag, but that's a common risk with other investments as well.
Do a search on HackerNews for early articles on Theranos. I can recall a lot of accusations of "sexism" being thrown around if anyone questioned the narrative of Holmes' technical pedigree.
>With just a bit of good sense, the VC can save lot of money
Or they can get on board the Ponzi and just make sure they get out in time, and make billions.
However, the history of Enochian magic is actually quite interesting and revolves around John Dee, the origination of the idea of manifest destiny, and ultimately England’s exploration of the “new world”.
And which is "Full Self Driving"? One man's very early stage "tangible product" is another's "vapourware".
What amazes me the most is that he is able to get project management in place that works. Somehow most (or all) of his companies get shit done, and it is indeed some amazingly complex shit. That may be his super power, beyond having been lucky with his first investments giving him the billions for the next endeavors.
A grifter promises things, none of which have ever happened.
Hyperloop, Cybertruck, inter-city rocket flights, Mars colony - these are ideas that haven't or won't succeed because they're ridiculously impractical and/or pointless, and seem to be more about projecting a futuristic image than anything else. (The alternative explanation is that he's a lot dumber than he seems.)
But, he throws ideas at the wall and some of them work out. It's a similar thing venture capital companies do with their startup portfolios, but mixed in with a lot more futuristic PR fluff ideas.
If you look at how he uses Twitter and other public ways to pump up stock prices, it seems likely that he figured out early on that there's lots of money in convincing people that the future is just around the corner and that you should buy shares in his companies to get in on the action.
He's the wealthiest-on-paper person in the world not because of the value produced by his companies, but because of the future value he's convinced people that his companies have.
In light of his recent difficulties with Python (and in combination with a few other bizarre comments and actions) this is starting to seem increasingly likely.
I can't believe you're serious if you don't think any one of these would be considered career-capping achievements for most people.
My previous comment wasn't saying Musk hasn't achieved anything. I was making a couple of points:
1. He tends to throw more ideas, more publicly, at the wall than most tech entrepreneurs.
2. Some of those ideas seem to be obviously impractical, to the point that he (hopefully!) must realize that, and the're probably intended more to boost the image of his companies in order to pump up stock value. And if you accept this line of argument, it's been a staggering success, making him the richest on-paper person in the world based on a car company and an aerospace company which, without his clever grift, would be worth a tiny fraction of their current valuation.
I can only marvel at the stuff and complexity SpaceX and Tesla seem to be able to pull off, both in terms of software and hardware engineering and other organizing and logistics.
- he is publicly brash and careless, but privately very efficient and savvy
- or his companies get shit done without his involvement, or despite his attempts at getting involved rather than because of them.
He might be brash but he’s clearly been an effective leader.
Same with neuralink, it's not just words.
The only thing he started himself that has worked out so far is SpaceX. Yet the whole Martian colony line is 100% grift. Starlink might yet flop, as it needs more subscribers than it probably can support. SpaceX has been very good at eliciting government handouts.
Starship will absolutely not be able to turn around in less than 30 days until after they figure out a tile scheme different enough from NASA's, if ever.
It is very far from certain the chopsticks catching scheme will work.
Each time a Superheavy detonates on the launchpad (which will happen) will set them back months, because it will wipe out the whole "stage 0" and tank farm.
> Musk bought into both of those
Very early on. And grew, at least Tesla, many orders of magnitude from early prototype to mass production.
> SpaceX has been very good at eliciting government handouts
Contracts, not handouts. Which they have delivered on in spades.
Starship and Starlink are still early, yes. But Falcon 9 has brought launch costs down considerably, is putting more mass to orbit than the rest of the world combined, and is currently the only way the United States can get astronauts into orbit.
You correctly do not assert that Martian colonization or suborbital passenger or freight service are better than grift even with a 100% Starship success.
You correctly do not assert that any other Musk initiative, including hyperloop, domestic robots, self-driving cars, electric trucks, are anything other than grift.
And “government subsidy” is a complete red herring. Inventing and building things takes money, I don’t care if that comes from the government or private investors. I’d say he has plenty to show for the investment the government made in his companies.
The only reason he has as much as he does is via grift, puffing the value of his properties. He has delivered a bunch of legendarily unreliable expensive cars and a bunch of rocket launches, and been handed pots of money of far greater value than anything he has delivered. Grift.
And he gets free puffery from internet volunteers.
I'm sure you've heard of the boring company which would revolutionize traffic except it did not and never will. He says "I have this idea make it work". This is the limit of his capability. In that way he's pretty similar to Elizabeth Holmes, except he isn't playing with the health of individuals for monetary gain.
I agree he is not just a 'luck' guy; he work(ed)(s) hard, is very persistent & pushes boundaries; he also knows how to manipulate the world successfully to pursue his goals, like Jobs & Gates & others before him. However, as far as we know, they weren't walking such a fine line close to fraud (although Gates was of course somewhat close to the illegal line with his anti-competitive actions in the EEE times).
Musk is at worst comparable to people like Steve Jobs or Donald Trump: people with a near pathological need to prove that they deserve their wealth by taking stupid risks. Risks that sometimes pay off. For every Trump or Musk, there are probably ten rich sons who took stupid risks and failed so bad they didn't get to take such risks anymore.
Is this actually true? The only air-launched SpaceX project I could find was the cancelled Falcon 9 Air [1], which I don't think actually flew, and was years after the Falcon 1.
Was there some undocumented air-launched SpaceX project going on between 2002 and 2006?
The hyped private project I remember from around that time was SpaceShipOne[2], which won the "X Prize", but that was done by Scaled Composites, not SpaceX.
[1] https://en.wikipedia.org/wiki/SpaceX_launch_vehicles#Falcon_...
It wasn't this way 10 years ago, but the list of things his companies are purported to do is now quite a bit longer than what they actually do.
And 10 years ago, the list of things they were merely purported to do includes many of the things that today they actually do. E.g. manufacturing EVs at scale, reusing rockets, etc.
> In a phone interview, Chairman Rene Sindlev admitted to us “I knew that he had been charged for 14 (felony) counts” but moved forward with the deal and expanded the relationship anyway.
If he's real, you look like an idiot and might get sued.
If he's good at his con you won't know which other people have also seen through it. If you bring it up with a believer, you're in for a harsh response.
If it's just a temporary con that will die soon, it doesn't need you to help it die.
It costs at least something to do due diligence, so not everyone will know it's a con. You've spent the effort and invested something. You have a sunk cost, why not wait for a bigger fool to come along? This is maybe the big one, because this is a mechanism for snowballing the thing.
End of the day, authorities need more resources to find these kinds of things, and they need resilience against losing cases if they are going to try a lot of shady practices.
Maybe my biggest complaint about this world is when I see conmen living in the open. I've come across several in my life of various sizes.
Nikola Motor Co was valued $22B with a "fully functional" truck rolling downhill.
Maddoff ponzied $65B without a business.
It really is wild that so much money gets thrown at frauds without proper due diligence.
The goal is take meetings with those who don't probe too deep. Who doesn't ask too many questions? Personally a trend I've seen it starts with groups/investors who want to break into the space and jump at any deal because that's all they have. After you get a lead, it's relatively easy to get follow on money that almost never asks questions.
If you're willing to out right lie you can get very far. It catches up as eventually you run out of groups who are willing to believe the lies.
It caught my eye when I was looking through their accounts and saw a very dubious clause that defined the way they recognized revenue. Basically it said management can unilaterally decide when revenue happens, and they were deciding it happened whenever they dispersed a press release about a supposed new major contract being signed. The money never existed.
I decided they were a fraud for certain when I used Google Earth to search the addresses of their offices in various countries they claimed to do business in. Time after time, the result was a dead end dirt road in the African bush, or some dingy hovel in South East Asia occupied by a suspicious looking night club.
It was that easy. I had the short on for about a year until a major hedge fund released a report on it. Shares fell ~90% pretty quickly. They've been delisted since.
https://www.cnbc.com/2018/04/04/controversial-crypto-stock-l...
https://www.wsj.com/articles/longfin-collapse-puts-focus-on-...
How would a broker treat a customer's short position in, say RSX?
Matt Levine has done a nice writeup about these cases. Basically, you're stuck loaning the stock, so you keep paying loan fees. If you're unable to close the short, you're stuck paying those fees forever, and you never make an actual profit on the short.
> ... close friendship and mentee relationship with Dr. Anthony Fauci and his relationship with Bill Gates, Dybul called Gumrukcu a “rare genius”
> Dr. Brosgart has served as a Senior Advisor on Science and Policy for the CDC since 2011, in addition to her roles as director on Enochian’s board ...
This must be an odd kind of company to work for, unless they're based in Turkey. "Joe, your job today is to fly to Turkey and look around old magic shops..."
https://www.sec.gov/Archives/edgar/data/1527728/000173112222...
https://www.justice.gov/usao-vt/pr/two-men-charged-murder-hi...
Hopefully justice will prevail. It's one thing to defraud people, it's another to eliminate one's victim so they don't testify in a court of law...
Does NASDAQ have any rules preventing major shareholders from listing if they are actively being investigated or literally on probation? Shouldn't this be a thing? Do they not background check major shareholders of companies trying to list? An alleged major reason big exchanges have valuation requirements for companies to meet the list is to prevent this kind of thing.
Energy Vault is over $2B. It was approaching $3B not long ago. It is still a long way to zero, for a transparent grift play.
They could still borrow against their market cap and buy some actually functional tech. And then ruin that.
I don't argue with people who identify as Turkish or German. I don't know if Sahin identifies as either or both. I know that it is harder for Turkish immigrants to get a good education in Germany, especially during the time he grew up in. I also don't care much about the debate of how useful immigrants are, because the result may very well be that they aren't on average that useful and that quite a large portion of criminals are immigrants. Usefulness or consequence to society should not matter for the rights of an individual. And immigration control always comes down to violating someones rights in order to somehow get rid of them if they are unwanted for some reason.
The suffix -iye, however, is also a suffix that is used in Turkish coined words of Persian and Arabic compounds where it means -ness or -ity: https://en.m.wiktionary.org/wiki/یت#Ottoman_Turkish
There is kurabiye (gulabiye = gulab (rosewater) + -iye), and later coins such as cumhuriyet (cumhur (general public) + -iyet).
Türkiye is not such a coinage. In Ottoman Turkish Türkiye would mean Turkness.
Pharma bro just got out of jail on good behaviour super excited to see how many lives they ruin next...