Timur Turlov started dreaming of making it big on Wall Street from the day he started slinging stocks for a Moscow brokerage in 2003 as a part-time junior trader aged just 16.

The Russian-born Kazakh financier went on to realise some of his dreams when his brokerage Freedom Finance was listed on the US Nasdaq in 2019. It boasts that it became the first financial investment company from Russia and Central Asia to be listed on a US bourse.

“It was a big dream for us,” 35-year-old Turlov told Forbes in 2021. “I had become a public company that would be good enough to be traded on the [US exchanges.] Because that’s the top of the business.”

His firm has grown into a business with an estimated worth of $3.2bn, employing more than 2,900 people across 15 countries. The enterprise has also diversified from retail brokerage into investment banking, consumer banking, insurance, mortgages and online food delivery. 

However, Turlov’s dreams are now at risk of turning into a nightmare because the US public listing has triggered attacks on the firm’s trading practices. Freedom Finance is now under intense scrutiny from financial regulators and one of the market’s biggest short-sellers.

The short-seller, Hindenburg Research, an aggressive firm that has lately tussled with iconic tycoons such as Carl Icahn and Gautam Adani, said its probe into Freedom showed the company still does business in the Russian market and had "openly flouted sanctions".

Analysts at Hindenburg claim that Freedom is “brazenly circumventing sanctions”, showing tell-tale signs of overstating its revenue, using customer funds for risky and illiquid market moves and manipulating the market both as part of its own investments and to boost its own traded shares.

Hindenburg’s reports are hard-hitting and tend to hit the target. Shares of the Adani Group companies sank between 3% and 6% after Deloitte resigned as auditor of Adani Ports, an exit that was prompted by the publication of a report by the short-seller in January.

Freedom’s share price on the Nasdaq sank 3% to $72.05 after Hindenburg published its research on August 15, but it has since rallied to $97.75. Turlov owns about 70% of the stock, which means the stock is less vulnerable to investor sentiment. 

In a LinkedIn post, Turlov issued a partial rebuttal of Hindenburg’s report, suggesting that their allegations were based on dealing with one former employee, who worked at the brokerage for less than a year.

“I will not hide that it is very unpleasant when they throw mud at you, referring to anonymous sources, but I realise that this is the price that you have to pay for publicity,” wrote Turlov.

Former employees interviewed by Hindenburg claim that client money ran from Freedom’s offices in Russia and Kazakhstan through a “Belizean entity privately owned by Freedom’s CEO”. Filings made with the SEC show that the entity represented 60% of Freedom’s fee and commission income for the year ended March 31.

One former staffer told Hindenburg that Russian money laundering was rampant and said that he had seen suitcases with $2.5mn in cash brought in by a client. 

“Just bring your money. There’s no source of income, source of funds. There’s no KYC [know-your-client]. Nothing,” the firm said, quoting the former employee. “The best part is this is violating almost every country’s anti-money and anti-terrorist financing laws.”

Turlov’s firm is incorporated in the US state of Nevada, although its main office is in Kazakhstan, where it serves Kazakhs and Russians seeking the next hot initial public offering from Silicon Valley.

Investors were lured by Freedom’s ability to offer access to the frothy debuts of gaming company Zynga, in 2012, social network Facebook and electronic vehicle maker Tesla.

The year of 2021 proved a boom year for the company as an IPO surge lifted all boats. However, the market for US listings fell off a cliff last year due to high inflation and rising interest rates. Freedom’s Primary Placement Fund, which provides qualified and unqualified investors with a “readymade IPO portfolio” has lost around 80% from its peak in dollar terms, according to its website.

Another peculiarity in how Freedom operates is that access to those hot US stocks comes via a mystery hedge fund, which acquires shares directly from stock IPO underwriters, and then passes the shares along to Freedom customers via Freedom’s Belize affiliate.

However, that hedge fund may not even exist, according to Hindenburg. It quoted a former Freedom employee as saying “no one knows” who the hedge fund is and as concluding, “My suspicion is there is no actual IPO [allocation].”

Multiple reports and sources have indicated that the firm’s sales staff offer clients better access to top US IPOs if they purchase Freedom’s own stock.

Turlov owns about 70% of the stock, which means that the holding’s shares prices are less prone to overall market sentiment.

“Clients are not obliged per say but they are encouraged to buy,” said a market source. “The sales team are, of course, motivated to sell their own stock. Also, it’s illiquid because they don’t have many shareholders outside the owner and all of the clients so they can write whatever price they like.”

An industry source familiar with Freedom Finance told bne IntelliNews that the firm has “always been unscrupulous in terms of KYC rules”.

“There have always been certain second and third-tier brokerage firms in Russia who accept briefcases with millions of dollars from officials who have received that money in bribes,” explained the industry source. “Those officials, who have already bought several apartments, are approached by the broker who promises them 50% returns a year.”   

Freedom's Belize operation, FFIN Belize, was set up just months after the US sanctioned Russia in 2014 following Moscow’s annexation of Crimea. In a regulatory filing from 2014, Freedom said FFIN Belize was opened to “provide easier access to the US securities markets than a Russian or Kazakhstan company could provide”.

However, Hindenburg claims FFIN Belize advertises the ability to send rubles via Alfa Bank, enabling clients to send Russian currency via a sanctioned bank right into the US equity market.

A darling of Bloomberg News and a former columnist at Forbes Russia, Turlov has had a meteoric rise since starting at the small Moscow firm World Capital Investments at 16.

Hollywood movies about Wall Street had stimulated his interest in working in finance. As a young boy growing up in Russia, he had heard about an acquaintance using his computer to buy and sell stocks. “I remembered these Wall Street movies and that if you are doing something with the stock market, you should be very rich,” Turlov told Forbes in 2021.

After his initiation at World Capital, Turlov joined the brokerage arm of Uniastrum Bank two year later in 2005. The young financier helped build access for clients to stock exchanges in the US until the 2008 credit crisis brought everything crashing down.

All of his colleagues were fired, and the unit was closed but Turlov rallied them around to set up his own brokerage using $100,000 in severance pay from Uniastrum as start-up capital.

In the same year, Turlov graduated with a degree in economics and management from Moscow’s State Technical University and got married.

The modus operandi of the company, which became Freedom Finance, was to provide Russians with access to Turlov’s beloved US stock markets.

But competition in Moscow amongst second and third-tier brokers in 2011 was intense, so Turlov relocated to Almaty in Kazakhstan.

It turned out to be a prudent and prescient decision, given how the Russia capital has been slowly dislocated from international capital markets since 2014 by sanctions imposed over Ukraine.

After Russia's full-scale invasion of its neighbour in February 2022, dozens of top managers from Freedom relocated five months later from Moscow to Kazakhstan where they now work in the Astana International Financial Centre (AIFC).

In June last year, Turlov renounced his Russian citizenship, saying that he had become a citizen of Kazakhstan, where he and his family have lived for more than 10 years.

Turlov posted on Instagram that he had received a Kazakh passport: “It breathes freely here, and I believe that Kazakhstan, thanks to its peaceful and hospitable policy, will be able to build a new, richer, more efficient, just state.”

Freedom’s employees continue to work with Russian clients, but, they say, only in a consulting capacity. Russian clients, who trade in securities via the Russian entity, have been offered the opportunity to transfer their brokerage accounts to Freedom Finance Global.

In Kazakhstan, market sources said the firm has a track record of investing in so-called “penny stocks” and using high-pressure sales tactics to entice investors to buy the risky shares.

“Freedom has been rapped on the knuckles many times in Kazakhstan but the local regulator there is not very keen on taking on a person,who owns several billion and could grind them to dust,” a CIS fund manager familiar with the company told bne IntelliNews.

Freedom completed the sale of its Russian assets in February for around $140mn. At the time, Freedom said it had "completely ceased doing business in Russia".

With no tangible assets in Russia anymore, Turlov said Freedom was trying to work with Russian clients in the same way as Western banks do.

Freedom seems to be in permanent expansion mode – no matter the global macroeconomic climate. Turlov told Reuters on August 17 that he was now looking at launching banking and brokerage services in Turkey and Azerbaijan, as well as expanding business in Kyrgyzstan and Uzbekistan.

In a 2021 video interview with the Russian Big Money blog, Turlov said his work is all-consuming and he has little time for fishing or any hobbies. Most of his free time at the weekend is taken up with his family but he does find time for playing chess.

Turlov, who reportedly keeps life-size cutouts of Donald Trump, Elon Musk and Joe Biden at the company's Almaty offices, heads up the Kazakhstan Chess Federation.

A former collector of fine wines, Turlov told the Big Money interviewer that he has now abandoned alcohol.  “I understood when I stopped spending time on that I had much more energy,” said Turlov. 

Freedom and Turlov were sanctioned by Ukraine in December last year for their links to Russia, with critics of the firm saying that this could be just the start of increased attention from Western regulators.

On August 14, Freedom received a letter from Nasdaq stating that the company wasn't in compliance with the exchange's listing rule as a result of its failure to file its quarterly reports in a timely fashion.

The company’s previous auditors, a small Utah-based firm called WSRP LLC, was sanctioned last December by the Public Company Accounting Oversight Board for failing to “inquire about the business purpose of… related party transactions”. Freedom also had to restate its 2022 earnings and three different quarterly reports.