Jack Dorsey, founder of phone payments company Block, lost 15.4% of his fortune after the US short selling company Hindenburg Research published a report alleging fraud at his company.

Hindenburg accused Block of fraud by inflating the value of its stock by lying and manipulating internal numbers, enabling Jack Dorsey and his partner Jim McKelvey to make significant profits.

Following Thursday's report, Block's shares fell as much as 22%, before closing down 15%.

Bloomberg reported that Dorsey's fortune, the former Twitter CEO, immediately fell by $761 million to $4.2 billion.

Following the stock tumble, the phone payments company threatened legal action against Hindenburg.

Most of Dorsey's fortune is tied to Block, with his stake in the company worth $3 billion.

Dorsey was born on November 19, 1976, in St. Louis, Missouri, to an American father and an Italian mother. He studied at the University of Missouri Rula in 1995 for two years and then moved to New York University, leaving before the final semester of graduation, to devote himself to starting Twitter.

Dorsey set up his first company in 2000 in Auckland and specialized in sending mail, emergency services and taxis over the Internet. One of his most notable achievements was co-founding Twitter on March 21, 2006.

In 2010, Dorsey co-founded with Jim McKelvey a small business platform that accepted credit and debit card payments on a small, mobile-connected mobile device called Square. Later, Square was transformed into a free mobile app, and its name was changed to Block.