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ustin-based short seller Blue Orca has launched a scathing attack on Sun Communities, accusing its CEO of engaging in undisclosed transactions with an independent board member's family. The report claims that CEO Gary Shiffman took a $4 million loan from the family of Brian Hermelin, who chairs the compensation committee and serves on the audit committee, to buy one of Michigan's most expensive homes. Blue Orca alleges that this is not an isolated incident, as Shiffman has also borrowed money from another board member.

    Blue Orca admits to being biased against Sun Communities, having a short position in the stock and standing to gain significantly if the share price declines. The report highlights several conflicts of interest and dubious executive behavior, including underreporting recurring capital expenditures, which could inflate the company's share price by as much as 48%. Blue Orca also points to a history of alleged accounting shenanigans and reporting failures, including a 2006 SEC action against Shiffman.

    Sun Communities has not responded to Fortune's requests for comment. The company has robustly disclosed several related party transactions to investors, including its lease agreement with American Center, where Shiffman's family indirectly owns a significant stake. Blue Orca concludes that Sun Communities is an "egregious governance failure tainted by scandal" and urges investors to do their own research before making any investment decisions.

    The report has had little impact on the stock price so far, which is down less than 1% in the past five days but up around 18% in the past year. However, Blue Orca's allegations have sparked debate among financial bloggers, with some dismissing the claims as "bad optics" while others see them as a serious concern.