Carson Block, a gangster rap enthusiast who doesn’t like to give his exact address because he said he’s received death threats, is taking responsibility for billions of dollars in stock declines that have left everyone from John Paulson to Hank Greenberg nursing losses.
Sino-Forest Corp. (TRE), an operator of timber plantations backed by Paulson & Co., plunged 71 percent in two days last week after Block’s Muddy Waters Research said it was betting against the shares. Paulson, whose New York-based hedge fund earned $15 billion in a single year while Block was developing a company called Love Box Self Storage in Shanghai, may have lost $325 million on Toronto-traded Sino-Forest.
“There are going to be people who say, well, I caused this,” Block said in a telephone interview from Hong Kong. “In one sense, yes, had I not published on that date, then the money would not have been lost. But on the other hand, I really feel that this company is a cancer on the financial system, because it just keeps sucking in more money every year.”
Block made a name for himself with China MediaExpress Holdings Inc. (CCME) and Rino International Corp. (RINO), saying they manipulated financial statements. China MediaExpress counted former American International Group Inc. Chief Executive Officer Greenberg’s C.V. Starr & Co. as a top owner. The shares have slid 93 percent since Block’s February report. Rino said in November that its financial statements were unreliable, less than two weeks after Block published his statements, and is down 96 percent.
