Timur Turlov

Key Points

• Identity: Timur Turlov is a 37-year-old Kazakhstani billionaire, CEO, and majority shareholder of Freedom Holding Corp., a Nasdaq-traded financial services firm based in Almaty, Kazakhstan.

• Legal Issues: Under investigation by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) since at least 2022 for compliance issues, insider stock moves, and ties to sanctioned individuals.

• Allegations: Hindenburg Research accused Freedom Holding of flouting sanctions, engaging in fake revenue schemes, commingling customer funds, and market manipulation. Ukrainian authorities have sanctioned Turlov and frozen his assets due to Russian ties.

• Customer Feedback: Limited direct customer reviews are available, with no specific positive or negative feedback cited in the sources.

• Risks: High legal, reputational, and financial risks due to ongoing investigations, sanctions, and allegations of fraudulent practices.

• Cautionary Note: Turlov’s involvement with Freedom Holding and its regulatory scrutiny make him a high-risk individual for business or investment partnerships.

Overview

Timur Turlov, born in Moscow in 1987, is a Kazakhstani entrepreneur and the founder, CEO, and majority shareholder (70%) of Freedom Holding Corp., a financial services company headquartered in Almaty, Kazakhstan. Founded in 2008 as Freedom Finance IC, the company provides brokerage, investment banking, and financial services across 22 countries, including Central Asia, Europe, and the U.S. Freedom Holding reported $601 million in revenue for the year ending March 31, 2024, and has been listed on the Nasdaq since 2019 under the ticker FRHC. Turlov, worth an estimated $3.2–$3.6 billion, renounced his Russian and St. Kitts and Nevis citizenships in 2022 to become a Kazakhstani citizen. A chess enthusiast, he has sponsored major FIDE events, including the 2023 World Championship. Turlov lives in Almaty with his wife and six children and holds a bachelor’s degree in economics from Russian State Technological University (2009).

Allegations and Concerns

Serious allegations and regulatory concerns have been raised against Turlov and Freedom Holding:

• U.S. Investigations: Since at least 2022, the DOJ and SEC have been probing Freedom Holding for compliance issues, insider stock trading, and affiliations with sanctioned individuals. The U.S. Attorney’s Office for Massachusetts is also making early inquiries following a civil probe that uncovered potential crimes.

• Hindenburg Research Report: In August 2023, Hindenburg Research accused Freedom Holding of “brazenly skirting sanctions,” showing signs of fake revenue, commingling customer funds, and engaging in risky, leveraged market bets. The report alleged that Freedom Holding continued operations in Russia post-Ukraine invasion and facilitated transactions for sanctioned individuals via a Belizean holding company owned by Turlov.

• Ukrainian Sanctions: Ukrainian authorities placed Turlov and Freedom Holding on a sanctions list and froze their assets due to perceived Russian ties, particularly after the company’s Russian business was sold to a Freedom employee for $140 million to evade sanctions.

• Regulatory Non-Compliance: Hindenburg alleged that Freedom Holding flouts anti-money laundering (AML) and know-your-customer (KYC) regulations, with one source describing the company as “blatantly taking a s*** on regulations and rules.” Citron Research compared Freedom to Sam Bankman-Fried’s fraudulent Alameda Research.

• No Criminal Charges: As of the latest reports, no criminal charges have been filed against Turlov, but the ongoing investigations and sanctions are significant red flags.

These allegations suggest systemic issues in Freedom Holding’s operations, with Turlov at the center due to his majority ownership and leadership role.

Customer Feedback

No direct customer feedback is cited in the provided sources:

• Positive Feedback: There are no specific reviews or testimonials praising Freedom Holding’s services or Turlov’s leadership on platforms like Trustpilot, Yelp, or financial forums.

• Negative Feedback: Similarly, no negative customer reviews are documented, which may reflect a low retail client profile or limited public engagement on review platforms.

The absence of customer feedback is notable, as Freedom Holding primarily serves institutional and high-net-worth clients rather than retail investors, limiting public visibility. This lack of transparency makes it difficult to assess client satisfaction or service quality.

Risk Considerations

• Legal Risks:

  • Ongoing DOJ and SEC investigations could lead to criminal charges, fines, or regulatory sanctions, particularly if evidence of sanctions violations or securities fraud is substantiated.

  • Ukrainian sanctions and potential future sanctions from Western authorities increase legal exposure for Turlov and Freedom Holding.

• Reputational Risks:

  • Hindenburg’s allegations and Ukrainian sanctions have publicly damaged Turlov’s and Freedom Holding’s reputation, potentially deterring investors, clients, and partners.

  • Turlov’s ties to chess sponsorships, while positive, may face scrutiny if FIDE or other organizations distance themselves due to his legal troubles.

• Financial Risks:

  • Investors in Freedom Holding (FRHC) face risks of stock volatility or losses if investigations confirm fraudulent practices or lead to penalties. The stock dropped after the Hindenburg report but later recovered 22%.

  • Clients risk financial losses if Freedom Holding’s alleged commingling of funds or risky market bets results in insolvency or mismanagement.

• Operational Risks:

  • Freedom Holding’s operations across 22 countries, including high-risk jurisdictions, expose it to regulatory inconsistencies and potential disruptions.

  • The sale of its Russian business to an employee raises concerns about the legitimacy of its divestment strategy and ongoing ties to sanctioned regions.

Business Relations and Associations

• Freedom Holding Corp.: Turlov owns 70% of the company and serves as its chairman and CEO. The firm operates in brokerage, banking, insurance, and consumer services, with offices in Esentai Tower, Almaty, alongside tenants like Ritz-Carlton and Ernst & Young.

• FIDE Sponsorships: Turlov is a major sponsor of the International Chess Federation (FIDE), funding events like the 2023 World Championship (2 million euro prize fund), 2022 World Rapid & Blitz, 2023 Women’s Grand Prix, 2023 FIDE World Cup, and World Schools Teams Championship.

• Belizean Holding Company: Turlov owns an offshore affiliate in Belize, allegedly used to facilitate transactions for sanctioned individuals, raising compliance concerns.

• No Notable Individuals: No specific executives, partners, or clients are named in the sources, though Turlov’s interactions with FIDE officials and Kazakhstani business circles are implied through his sponsorships and headquarters location.

Legal and Financial Concerns

• Lawsuits: At least five law firms are investigating potential securities law violations on behalf of Freedom Holding investors following the Hindenburg report, though no formal lawsuits are confirmed.

• Bankruptcy Records: No evidence of personal or corporate bankruptcy filings is noted for Turlov or Freedom Holding.

• Unpaid Debts: No records of unpaid debts or liens are mentioned.

• Regulatory Investigations: The DOJ and SEC investigations focus on compliance, insider trading, and sanctioned affiliations. The SEC’s Boston office has been probing Freedom Holding for months, with documents indicating potential securities violations.

• Sanctions: Ukrainian authorities have sanctioned Turlov and frozen Freedom Holding’s assets, citing Russian ties. The U.S. Treasury has not yet imposed sanctions, but the Belizean affiliate’s activities raise concerns.

• No Criminal Charges: As of October 2023, no charges have been filed, but the investigations remain active.

Risk Assessment Table

Expert Opinion

Analytical Summary: Timur Turlov is a successful but controversial figure, having built Freedom Holding into a $5 billion financial services firm with a global presence. His wealth and chess sponsorships reflect ambition and influence, but serious allegations of sanctions violations, fake revenue, and regulatory non-compliance cast a dark shadow. The DOJ and SEC investigations, intensified by Hindenburg Research’s damning report, suggest potential systemic issues in Freedom Holding’s operations, with Turlov’s majority ownership placing him at the center of scrutiny. Ukrainian sanctions and the lack of customer feedback further erode trust. While Turlov denies the allegations, calling them “misinformation,” the ongoing probes and public accusations indicate significant risks for investors, clients, and partners.

Pros:

• Built a successful, Nasdaq-listed financial services firm with $601 million in revenue and operations in 22 countries.

• Major supporter of global chess, enhancing his public profile and cultural influence.

• No criminal charges filed to date, suggesting allegations remain unproven.

Cons:

• Under DOJ and SEC investigation for serious compliance and securities issues, with potential for charges or penalties.

• Hindenburg’s allegations of fraud, sanctions violations, and market manipulation are supported by detailed evidence, damaging credibility.

• Ukrainian sanctions and Russian ties raise geopolitical and ethical concerns.

• Lack of customer feedback limits transparency about Freedom Holding’s service quality.

Cautionary Advice: Individuals or entities considering business with Turlov or Freedom Holding should proceed with extreme caution. Verify the status of DOJ and SEC investigations through public records or legal counsel, and assess the impact of Ukrainian sanctions on potential partnerships. Investors should closely monitor Freedom Holding’s stock (FRHC) and SEC filings for updates on regulatory actions. Given the allegations of fund commingling and risky bets, clients should secure independent audits of any financial engagements. Explore alternative financial service providers with cleaner regulatory records to avoid exposure to Turlov’s legal and reputational risks. Chess organizations like FIDE should evaluate the optics of continued sponsorship ties.

Key Citations

• https://www.chess.com/news/view/fide-main-sponsor-freedom-holding-doj-investigation
• https://www.cnbc.com/2023/10/06/kazakh-fintech-freedom-holding-is-being-investigated-by-doj-sec-documents-show.html
• https://www.forbes.com/profile/timur-turlov/
• https://www.bloomberg.com/billionaires/profiles/timur-r-turlov/
• https://timurturlov.com/
• https://www.justice.gov/opa/pr/us-sanctions-financial-and-technology-firms-supporting-russian-war-efforts