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UPDATE 1-Palihapitiya-backed Clover Health discloses SEC probe, rebuts short-seller allegations

UPDATE 1-Palihapitiya-backed Clover Health discloses SEC probe, rebuts short-seller allegations

· 02/05/2021 06:41
UPDATE 1-Palihapitiya-backed Clover Health discloses SEC probe, rebuts short-seller allegations

Adds more details and background

- Chamath Palihapitiya-backed Clover Health Investments Corp CLOV.O said on Friday it had received a letter from the U.S. Securities and Exchange Commission following a critical report published by noted short-selling specialist Hindenburg Research.

The company said it intends to cooperate with the investigation.

Clover, however, pushed back against the report from Hindenburg, saying some claims in the report were "completely untrue", especially around accusations of Palihapitiya's dearth of diligence.

"We believe that Hindenburg, which takes pains to call out their altruism in saying that they are not short on CLOV stock, is foolheartedly seeking to redeem itself by posturing as a white knight of the financial markets," Clover executives Vivek Garipalli and Andrew Toy said in a blog post on Friday.

They added that the report was "rife with ad-hominem attacks, sweeping inaccuracies and gross mischaracterizations".

On Thursday, Hindenburg published a scathing report, the title of which called Clover Health a "broken business," sending the insurance firm's shares down more than 10%, their biggest daily percentage drop in four months.


(Reporting by Anirban Sen and Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila)

((Anirban.Sen@thomsonreuters.com; (within U.S.+1 646 223 8780; outside U.S. +91 80 6182 3583) Twitter: @asenjourno;))