My reasoning is different.

They have repeatedly been forced to admit in court that they lied in the past. They have also had reserves invested with a fake bank whose CEO stole money from them and is now convicted in bank fraud. They claimed to be one of the largest holders of specific asset classes, but nobody trading those has any memory of trading them. And so on and so forth.

The refusing to allow a real audit is just icing on a cake consisting of a mountain of evidence of fraud.

As Matt Levine memorably said, they are "practically quilted out of red flags."