A financial analyst who blew the whistle on Bermuda-based Gerova Financial Services four years ago yesterday said he felt “vindicated” now that seven men were last month charged in the US in connection with an alleged $16 million fraud involving the firm.

Keith Dalrymple, who runs a small research firm with his wife in Bulgaria, published a report in early 2011 saying that Gerova was “likely fraudulent”.

But the firm hit back in the media and with lawsuits by individuals and firms linked with Gerova — all of which were later withdrawn or dismissed.

Jason Galanis, once dubbed “porn’s new king” in the US media after he bought a major stake in adult entertainment publisher Penthouse International Inc — now faces a string of charges brought by the US Securities and Exchange Commission (SEC), along with his father John Galanis, his two brothers Jared and Derek and others.

Mr Dalrymple said: “I feel vindicated — at long last.”

But, speaking to the Wall Street Journal, he said that it may be the last time his firm takes a public “short selling” position — a bet that a company will fail — after four years of a bruising battle with Gerova.

Mr Dalrymple said: “It’s not like a 1930s movie where they catch the bad guy and he says ‘you got me’. They’re going to fight.”

He set up Dalrymple Finance in 2007 to offer financial consulting and, at the time of the Gerova report, managed several million dollars for family offices, including a strategy of looking for short opportunities.

The firm’s focus included looking at special-purpose acquisition companies — firms created as shells with the purpose of buying operating companies — and spotted Gerova as a business of that type.

The SEC charges claim that Jason Galanis, with others, hatched a plot to dump millions of the company’s shares in an unregistered offering and distribution.

It alleges he enlisted family members, a family friend from the Republic of Kosovo, Gerova director Gary Hirst and Gavin Hamels, an American investment adviser to carry out the 2010 scheme.

The SEC filing with the US District Court in the Northern District of New York said that Gerova’s share price tumbled in reaction to the massive sell-off.

But the filing added that Jason Galanis orchestrated a second phase to stem the price decline by bribing two investment managers to buy Gerova shares for their respective clients’ accounts in order to create demand for the stock.

The filing said: “All told, Jason Galanis’ scheme reaped him and his family members over $16 million, all at the expense of unwitting investors.”

The Royal Gazette reported last month that charges had been filed and that a trial date in a Manhattan federal court is scheduled for April.

Gerova was valued at $748 million just before Mr Dalrymple release is report in 2011.

The Royal Gazette reported in 2012 that Gerova had sought US bankruptcy protection, listing debts of as much as $500 million.

Gerova, formerly known as Asia Special Situations Acquisition Corporation, took the step to protect its assets, then valued by the firm at $50 million, from creditors.

The company, which had offices in Cumberland House, Victoria Street, Hamilton, was liquidated in 2012.

When Jason Galanis took over Gerova in 2010, he was under a five-year bar as acting as an officer or director of a public company and paid $60,000 in civil penalties, agreed in 2007 to settle a separate 2007 SEC case.

It was alleged then that he had filed false accounting information for Penthouse International.