Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

Carl Icon has had a long career in markets, starting out as a stockbroker in 1961,

later becoming a risk-arboned options trader. In the 70s and 80s he was a notorious corporate

raider. He was accused of being an asset stripper, the worst kind of stripper, in his dealings

with TWA. Today he's a notorious activist investor known for forcing even the most respected CEOs to bend to his will,

like Apple's Tim Cook, who he pressured to return capital to investors through a share buyback

in 2014. Some of Icon's earliest arbitrage trades involved investing in closed-end mutual funds, a type of investment

company, which often trades at a discount to the value of the assets they hold. He would then

agitate for the fund to liquidate yielding a profit. Icon, who has spent his whole career on

offence, now finds himself playing defence, as another

activist investor, Hindenburg Research, is claiming that Icon's $18 billion market cap holding

company, Icon Enterprises, has a Ponzi-like economic structure that is sustained only to the extent that new money

coming in is willing to risk being the last holding the bag.

In brief, ICON is accused of using money taken in from new investors to pay out dividends

to old investors, and he's accused of doing this to keep the stock price

high, stock that he has pledged as collateral for a margin loan.

Hindenburg is a short-selling activist hedge fund run by Nate Anderson and earlier this year I

covered their allegations against Adani group.

Anderson is most famous for having released a video of Nicola's electric truck prototype

being towed up a hill in order to be pushed down to make a promotional video showing that the technology was fully operational.

Trevor Milton, the CEO of Nicola, ended up being convicted of fraud based partially

upon this evidence.

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