The Securities and Exchange Commission (SEC) is probing a scathing report on Clover Health Investments Corp by short-selling specialist Hindenburg Research. The SEC has told the insurance company to preserve any relevant documents, according to a Reuters report.
Clover, which is backed by Venture Capitalist Chamath Palihapitiya, said Friday that it would cooperate with the regulator.
The company said that the SEC had requested “document and data preservation from January 01, 2020, to the present, relating to certain matters that are referenced in the (Hindenburg) article.” The company also revealed a separate inquiry from the Department of Justice, but said it had not received any civil investigative demands or subpoenas in that inquiry, Reuters reported.
On Thursday, Hindenburg published a report that called Clover a “broken business” and said the insurance firm had not disclosed a DOJ investigation into its business model and its software product, Clover Assistant.
Clover’s shares plummeted more than 12% after the report was released, their largest daily percentage drop in four months, according to Reuters.
Clover said on Friday that some of the report’s claims were “completely untrue.” Clover execs Vivek Garipalli and Andrew Toy said in a blog post that the report was “rife with ad hominem attacks, sweeping inaccuracies and gross mischaracterizations.”
Clover, which sells Medicare-backed insurance plans, went public through a $3.7 billion deal with a special-purpose acquisition company backed by Palihapitiya, Reuters reported. Other investors include Google parent Alphabet Inc. and Sequoia Capital.