One of 2020’s hottest market trends was SPACs — and Chamath Palihapitiya, AKA the SPAC King, helped pave the way.

SPAC stands for special purpose acquisition company. It’s a nontraditional way for a company to begin trading publicly. The SPAC has an initial IPO and sells shares to raise capital. The capital raised is then used to buy or merge with an existing business.

Palihapitiya has become a bit of a celebrity on Wall Street after playing an intricate role in the deals that brought several big-name companies public.

His list includes Virgin Galactic Holdings, Inc. (NYSE: SPCE) and Opendoor Technologies Inc. (NASDAQ: OPEN). His SPAC, Social Capital Hedosophia Holdings Corp. V (NYSE: IPOE), is currently in talks with SoFi.

Thursday morning, Hindenburg Research — which gained notoriety last year with its critical analysis of Nikola Corporation (NASDAQ: NKLA) — released a short report on Palihapitiya’s medical-assistant software SPAC, Clover Health Investments (NASDAQ: CLOV).

In the Clover report, Hindenburg alleges the business is “under active investigation by the Department of Justice (DOJ), which is investigating at least 12 issues.” It goes on to say that “much of Clover’s sales are driven by a major undisclosed related party deal and misleading marketing targeting the elderly.”

CLOV stock is down more than 12% at writing.

In the report, Hindenburg, a well-known short seller, says it has taken no position in the stock. “We believe it is important to demonstrate the role short sellers play in a healthy, functioning market,” Hindenburg writes.

With the fresh memories of last week’s massive GameStop Corp. (NYSE: GME) short squeeze, Hindenburg said in its report, “these are unprecedented times.”

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