The Southern Investigative Reporting Foundation issued a new report “The Mitzvah Factory” highlighting the potential of millions of shares of stock about to hit the market.  Below are the summaries of the report:

  • The Karfunkel Brothers are billionaire immigrant success stories but their charitable foundations, while generous supporters of certain Hasidic charities, are also being used to expand their ownership stake in AmTrust Financial Services (AFSI).
  • SIRF dove deeply into their filings and found a host of complex–and baffling–transactions, all of which strengthens their grip on $AFSI while providing some tax benefits. Bonus: watch their explanations for all of this “evolve.”
  • The problem is, SIRF found out, Uncle Sam has some really clear rules about putting a large amount of your stock in a private family foundation; he hates when that happens. So if the IRS decides to enforce the rules, they may have to sell many millions of shares of stock on the open market.

Please recall that on 12/12/2013 the GeoTeam released a bearish article on AFSI, citing that the company appeared to be inflating earnings/net equity via offshore entities (captives), making it difficult for regulators to see the complete picture and/or get accurate information, and could face regulatory scrutiny.