XP Sues Grizzly Research for Defamation in US Court

XP filed a lawsuit in the US against Grizzly Research, alleging defamation over a March report accusing XP of running a "Ponzi scheme". XP claims to have suffered over $100 million in damages to its business and reputation. Grizzly Research and its owner, Siegfried Eggert, are accused of publishing the report with the intention of lowering XP's stock price to profit from their short positions. The lawsuit seeks compensatory and punitive damages.

Brazilian fintech company XP (NASDAQ:XP) has filed a lawsuit in the U.S. against short seller Grizzly Research, alleging defamation over a March report that accused XP of running a "Ponzi scheme." The lawsuit, filed in federal court in Manhattan, seeks unspecified compensatory and punitive damages.

According to the complaint, XP claims to have suffered over $100 million in damages to its business and reputation as a result of the report. The report, published by Grizzly Research, accused XP of engaging in a "Madoff-like Ponzi scheme" involving derivatives sales to retail clients, which were then funneled through special funds and misrepresented as proprietary trading profit.

XP argues that the report was "demonstrably false" and that Grizzly and its owner, Siegfried Eggert, published the report with the intention of driving down XP’s stock price so they could profit from their short positions. The lawsuit accuses Grizzly of acting "brazenly, maliciously, and recklessly" in publishing the report.

The report by Grizzly Research was published on March 12, and shares of XP fell 5.5% to $14.14 in New York that day. They closed down 32 cents at $19.48 on Monday. The lawsuit seeks unspecified compensatory and punitive damages.

Grizzly Research could not be immediately reached for comment. Lawyers for XP did not immediately respond to requests for alternative contact information. XP’s press office in Brazil declined to comment.

This lawsuit comes at a time when short sellers have increasingly faced legal challenges over their reports. Other short sellers have been sued in the United States over alleged defamatory reports.

References:
[1] https://www.investing.com/news/stock-market-news/brazils-xp-sues-short-seller-grizzly-research-in-new-york-alleges-defamation-4125576
[2] https://www.cryptopolitan.com/og-hyperliquid-trader-loses-3-7m-on-btc-eth/
[3] https://economictimes.indiatimes.com/industry/banking/finance/banking/odisha-government-allows-3-private-banks-to-handle-state-business/articleshow/122269242.cms