Short sellers are targeting Chinese companies that trade in North America, bringing down share prices and drawing lawsuits, Businessweek reports.
Chinese stocks trading in the U.S. and Canada have become a prime target for short sellers who sniff out suspicious financial statements--and hope to profit from declines in the companies' stock prices. Investors including John Paulson and Hank Greenberg have lost money on Chinese stocks that fell after questions were raised about them.
Case in point: Carson C. Block, 35, who says he passed his broker's exam when he was 19 and moved to Shanghai after graduating from the University of Southern California in 1998, founded Muddy Waters Research to scrutinize Chinese companies. He made a splash with a Feb. 3 report claiming that China MediaExpress Holdings (CCME), a Hong Kong-based provider of advertising on buses in China, manipulated financial statements. The company denies the allegations…
Read more at: http://www.businessweek.com/magazine/content/11_26/b4234052635513.htm?campaign_id=rss_topStories
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