Red Flags Raised by the Actors Involved in Nano Dimension-Murchison Fight


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A central character in the narrative that built up around the merger of Stratasys (Nasdaq: SSYS) with Desktop Metal (NYSE: DM) is that of Israeli electronics 3D printing firm Nano Dimension (Nasdaq: NNDM). Some have commented that Nano Dimension’s attempt at a hostile takeover of Stratasys was key to cementing the merger deal. However, Nano Dimension had its own pressure in the form of one of its largest institutional investors, Murchinson Ltd

Examining the players involved between Nano and Murchinson reveals a tangled web of parties with complex financial histories, including some who’ve been investigated by the U.S. Securities and Exchange Commission (SEC) and Department of Justice. Understanding the backgrounds of these companies may shed some light on their actions within the larger discussion of the merger. In a separate article, we discuss the complex history of Nano Dimension’s own management. Here, we look more closely at the background of some of its largest investors. 

Murchinson’s SEC Saga

After raising nearly $1.5 billion for the electronics 3D printing firm on Wall Street through a campaign of eight public offerings, Stern promised investors that he would make important acquisitions with the war chest. These smaller acquisitions were only a drop in the bucket for what would be Stern’s larger target, Stratasys. In the midst of its takeover attempts of Stratasys, Nano Dimension lost its biggest shareholder in ARK Invest. The financial management company sold all of its ARKQ shares in Nano Dimension starting in September 2022, going from holding almost 10 million shares in October 2021 to zero on October 4, 2022. The dynamics of that tale are explored in more detail in a separate article.

In its place, ARK left a smaller, Canadian investment management firm called Murchinson Ltd. as the top shareholder. As ARK pulled out, Murchinson made a non-binding offer in September 2022 to buy Nano for $4 a share, or roughly $995 million. 

Given the scrutiny that we placed on Nano Dimension, it’s worth mentioning that Murchinson, its principal Marc Bistricer, and trader Paul Zogala settled with the SEC for violating short sale regulations. Bistricer is actually the son of New York real estate mogul David Bistricer. A 2021 article on the SEC investigation from the Wall Street Journal suggests possible collusion between the Canadian firm and George Economou, the owner of a Greek shipping company called DryShips Inc. In 2016, on the brink of bankruptcy, the company suddenly found its stock jumping 1,500% in four days and becoming one of the most traded stocks on the Nasdaq, powered in part by retail investors. 

The SEC alleged that Murchinson used a series of subsidiaries to make hundreds of millions of dollars in transactions for stocks that Murchinson didn’t yet own, a violation of short selling regulations. The Wall Street Journal investigation implied that the stocks may have belonged to DryShips, as the shipping company issued about that much stock to a British Virgin Islands firm owned by Murchinson during that same time. 

Soon after DryShips’ meteoric rise, the stock began to fall, ultimately dropping almost 100 percent nearly a year later. Though the company and its owner weren’t listed in the settlement with the SEC, the Journal reported that “Economou, who maintained voting control with a negligible economic interest in the shipper, also benefited personally. He purchased the company’s bank loans at a discount before most of the share sales and controlled a ship management company that was paid fees by DryShips that rose as it used the proceeds from the share sales to acquire several new vessels. Mr. Economou later reversed course and bought out the company through another offshore company he controls, SPII Holdings Inc., in 2019, delisting its shares from Nasdaq.”

Depending on how exactly the parties may have benefited from a possibly questionable arrangement, it could be considered a pump-and-dump, short-and-distort strategy, or both. The former involves taking a stock trading for just a few dollars or less and artificially boosting it through positive press releases and chatter in online forums, then selling it at its peak. The latter relies on shorting the stock, betting on the price’s eventual fall through the purchase of future options, and then profiting off its ultimate drop. Typically, these schemes are performed with shell companies and dummy investors so as to hide the patterns. 

While pump-and-dumps often benefit from good news to make the price go up, short-and-distorts use bad publicity, particularly negative market research reports, to send the stock down. Hypothetically, multiple parties could perform both strategies, one artificially inflating the stock with vague press releases about a new, lucrative product or customer and the other could execute shareholder actions or publish a website meant to make the stock go down. 

With regard to Murchinson, however, the SEC ultimately settled, without naming DryShips or Economou in the agreement. The SEC charged Murchinson with “making erroneous order-marking information on hundreds of sale orders of their hedge fund client to the hedge fund’s brokers, causing those brokers to mismark the hedge funds’ sales as ‘long’” from June 2016 through October 2017. This resulted in a settlement of $8.15 million paid by the firm and its team. 

Anson Funds

As Murchinson and Nano took the fight to the courts, another Canadian investor came onto the scene to buy Nano stock. In May 2023, Anson Funds Management acquired 6.2 percent of Nano Dimension and began voicing concerns over the attempted Stratasys takeover and arguing for a change of management at the electronics 3D printing firm. 

Like Murchinson, Anson had its own trouble with U.S. legal authorities. In 2022, the firm was said to be under investigation by the Department of Justice alongside a number of other short sellers. A Bloomberg report noted that Anson had posted gains of 45 percent in two years, three times those of traditional long-short funds. To achieve those numbers, Anson had executed what some considered to be problematic tactics. 

For instance, the company “engaged in a controversial practice of betting that shares of cannabis companies would fall, and later participating in their secondary stock offerings — sales that often trigger price drops,” Bloomberg wrote. One business sued Anson for performing a “short attack” relying on false information. According to another lawsuit by a former researcher hired by the firm, Anson was reportedly fed pre-market information related to GE that it used to earn millions of dollars. 

In the case of a lawsuit lodged by Genius Brands, Anson was alleged to have performed a pump-and-dump scheme with the media company’s stock, purchasing it for $0.21 per share before rumors of a possible acquisition by Disney or Netflix sent the price up to $11. When the deal never materialized, the stock collapsed, but Anson was able to get out with over $100 million. Some accused Anson of using the same strategy on a number of other companies.

Another Questionable Investor  

Others who may have cashed out on Nano Dimension stock include a an individual who invested enough in the company to fit the SEC’s filing requirements: Orin Hirschman purchased 17,480,594 shares February 1, 2019, selling 8,097,710 on September 5, 2019. He then bought 27,590,800 on February 7, 2020 and sold 10,090,800 on March 30, 2020. 

Hirschman is said to serve as the president of AIGH Investment Partners LLC and the Director of OHR Pharmaceutical Inc. He previously worked at Wesray Capital, an “investment firm founded by former U.S. Secretary of the Treasury William E. Simon, and Randall Rose & Company, a $100 million money management firm based in New York.” Because Wesray Capital no longer exists, it’s impossible to validate Hirschman’s history there. As for Randall Rose & Company, there is nothing other than an address and Yelp page available online. Despite this high-profile experience, Hirschman also invested in questionable penny stocks like scPharmaceuticals and Cognition Therapeutics. 

Neither AIGH Capital Management LLC nor Ohr Pharmaceutical Inc. currently have websites, but Ohr Pharmaceutical merged with NeuBase Therapeutics, Inc. in 2019, before Hirschman and other Ohr personnel stepped down from the board. The Ohr team had carried with it some legal baggage, which included a lawsuit “alleging that several current and former officers violated federal securities laws between June 24, 2014 and January 4, 2018.”

This would seem to stem from the fact that Ohr, which became publicly traded through a reverse merger, sold defective medications, like EVIZON. Ohr Pharmaceuticals had purchased EVIZON and other assets  from another publicly traded company called Genera for just $200,000. Two years before it went under in 2009, Genera disclosed that EVIZON was uneffective. Nevertheless, Ohr marketed a rebranded version of the drug called Squalamine, using Genera data from 2003 to promote its effectiveness. It then paid an investment advisor company to put out a report giving the stock a buy rating, which was boosted by stock news sites like The Street, raising the value of Ohr’s shares. 

CVI, Empery, and Iroquois 

Yet another Nano investor that potentially raises red flags is Cayman Island-registered Capital Ventures International (CVI) Investments Inc., which, Utopia Capital Research notes, regularly invests in penny stocks, purchasing large amounts of shares in stocks that “enjoy remarkable and often times short-lived parabolic runs,” some of which have been confirmed to be pump-and-dump schemes.

Interestingly, CVI’s funds are managed by private equity firm Heights Capital Management, which is in turn owned by Susquehanna International Group, the trading giant founded by billionaires Jeffrey Yass and Arthur Dantchik, among others. Alongside Bank of America and Goldman Sachs, Susquehanna was sued for “self-dealing and engaging in improper proprietary trading.” With Citadel Securities and Virtu Americas LLC, Susquehanna was accused of depressing a company’s share price. 

Utopia Capital Research highlighted other Nano Dimension investors, Empery Asset Management and Iroquois Capital Management llc, to be following similarly suspicious investing behaviors. As for, Empery, the site wrote:

“This fund is a well-established player in the realm of micro/small cap companies. According to our Asgard database (a proprietary database and stock selection tool that identifies high-probability fraudulent/dubious companies based on several characteristics), Empery has been involved with other suspect tickers, such as BPTH, TRNX, DMPI, IMRN and XBIO among others. A quick look at the historical price action of these tickers will show the same trend; a very extended downward trend characterised by “spikes in volatility” that often times coincide with share offerings promptly followed by a schedule 13G filing showing Empery as shareholder.”

It’s important to note that Utopia was not discussing these investors in terms of Nano Dimension. They were all mentioned separately for their dealings with other penny stocks and just happened to buy large numbers of shares of Nano stock. 

What Does This All Mean for Nano Dimension?

In so many words, many of Nano Dimension’s institutional investors have been associated with financial improprieties in one way or another. Without a rigorous investigation by a regulatory body, however, it would be almost impossible to know what exactly is happening in the case of Nano Dimension, Murchinson, and the rest. It does raise important questions about how much of the drama related to these businesses is as authentic as they would have you believe and how much is part of some other strategy that outsiders may not be privy to.

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