Legendary short-seller Jim Chanos allegedly took $10 million from his firm to enrich himself and his girlfriend
Legendary short-seller Jim Chanos is best known for making a fortune after spotting fraud at Enron and for his bearish bets against Tesla $TSLA. Now, he’s being accused of misappropriating company funds for his personal use and making his girlfriend richer.
Conlon Holdings claims that Chanos used his firm, most recently known as Chanos & Co., as a “piggy bank,” withdrawing millions of dollars in loans for personal use, according to a lawsuit filed in New York state court over the weekend and first reported by Bloomberg News. Conlon invested in Chanos’s firm, formerly known as Kynikos Associates, in 2020.
Chanos, Conlon alleges, owes some $10 million of outstanding loans that he “never intended” to pay back, according to the lawsuit. Instead, he “planned on using his power as general partner to run the company into the ground, enjoy the tax benefits of his financial shenanigans, and leave his partners with nothing.”
Chanos is also accused of selling his company-owned luxury apartment in Miami for $17.8 million earlier this month without notifying his partners. He had previously sought more than $21 million for the property, according to The RealDeal.
Crystal Connors, Chanos’s girlfriend and an agent at One Sotheby’s International Realty, helped sell the property. The lawsuit claims she would have earned $540,000 from the sale at standard commission rates.
Conlon is seeking a court order calling for Chanos’s removal as general parter of Chanos & Co. and blocking him from transferring his proceeds from selling the property. In an interview with Bloomberg, Chanos called the lawsuit “puzzling and baseless,” adding that“the facts will show that the internal loan in question from the company was paid off in 2021.”
Despite his earlier success at shorting Enron, and later Wirecard, Chanos’ later bets haven’t been as successful. In November, Chanos said he would shut down his hedge funds, which managed less than $200 million at the time, down from $6 billion in 2008.
Chanos’s biggest failed short in recent years has been against Elon Musk’s Tesla, a company — and chief executive — he has repeatedly criticized publicly. His bets against Tesla go as far back as 2013. Earlier this week, Chanos expressed disdain for Musk’s promotion of article intelligence work at his xAI startup over Tesla.
Musk, for his part, taunted Chanos on Wednesday morning in reply to a Tesla influencer who Chanos’s short attempts and said “Never bet against Elon.”
“It’s not just that he would short Tesla, he would also push false stories about Tesla in the media, who performed for him like circus poodles!” Musk wrote on X $TWTR.
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