Carson Block

Block is a native of New York City, and grew up in Summit, New Jersey. His father Bill Block was an equity analyst and ran W.A.B. Capital, an equity research firm that focuses on small cap companies, and his mother Grace Smith works as a MetLife database administrator.{{cite news |last1=Lewis |first1=Jane |title=Carson Block: the world’s most feared short-seller |url=https://moneyweek.com/513313/carson-block-the-worlds-most-feared-short-seller |work=Money Week |date=August 21, 2019}}{{cite news |title=Carson Block: a Short-Selling Superstar |url=https://www.businessinsider.com/carson-block-a-short-selling-superstar-2012-12 |work=Business Insider |date=December 17, 2012}} His parents divorced when he was six years old. Block has been an atheist since he was in second grade. In middle school, he decided that he wanted to work in finance.

He earned an undergraduate B.S in Business Administration from the University of Southern California ('98). There, Block studied Chinese and Business (focusing on Finance).{{cite news |title=Class of 1961 |work=Brown Alumni Magazine |date= February 1999}} He moved to China after college, in 1998.{{cite news |last1=Kapadia |first1=Reshma |title=Stay on Guard When Investing in China, Expert Says. ‘Expect to Be Blindsided Again.’ |url=https://www.barrons.com/articles/investing-china-stocks-carson-block-risks-51639072881 |work=Barron's |date=December 13, 2021}}

Block later returned to the United States, and worked in investment banking for nine months in 1999 for the Los Angeles office of CIBC World Markets.{{cite news |last1=Rodriguez |first1=Juan Torres |title=The Value Perspective Podcast – with Carson Block |url=https://www.schroders.com/en-gb/uk/intermediary/insights/transcript-of-the-value-perspective-podcast-episode--with-carson-block/ |work=Value Perspective |publisher=Schroders |date=June 27, 2022}}{{cite news |last1=Hoffman |first1=Andy |title=Carson Block: The man who felled a forestry giant |url=https://www.theglobeandmail.com/report-on-business/careers/careers-leadership/carson-block-the-man-who-felled-a-forestry-giant/article587042/ |work=The Globe and Mail |date=July 15, 2011}} He then went to work with his father during 1999 to 2002, a period he describes as “very embittering” as he was “lied to by a parade of management” of internet companies.{{cite news |last1=Anderlini |first1=Jamil |title=New kid on the block |url=https://www.ft.com/content/75577f42-6e57-11e1-b98d-00144feab49a |work=Financial Times |date=March 20, 2012}} He quit equity analysis for law school.

He then attended Chicago-Kent College of Law, from which he holds a J.D. degree ('05).{{cite news|last=Kawa|first=Lucas|url=http://www.businessinsider.com/carson-block-a-short-selling-superstar-2012-12?op=1|title=How Short-Seller Carson Block Became The Most Hated Man In China|date=17 December 2012|newspaper=Business Insider|accessdate=14 January 2013}} He is an adjunct professor at the law school.{{cite news |last1=Wachtel |first1=Katya |title=Meet The Guy Who May Have Just Cost John Paulson $500 Million In 24 Hours |url=https://www.businessinsider.com/meet-the-guy-that-just-cost-john-paulson-500-million-2011-6 |issue=Business Insider |date=June 3, 2011}}

After graduating from law school, Block moved back to Shanghai, China, and worked in mergers and acquisitions and foreign direct investment for law firm Jones Day from 2005 until 2006. He lived in Shanghai until 2010. He left Jones Day and the practice of law to co-author a book with Robert Collins entitled Doing Business in China for Dummies. He also established a self-storage business in China in 2007.{{Cite web|url=https://dealbreaker.com/2019/08/muddy-waters-burford|title=Carson Block's Effort To Avoid Becoming His Father A Serious Pain For Potentially Fraudulent Businesses|last=Shazar|first=Jon|website=Dealbreaker|language=en-us|access-date=2020-03-31}}

He founded Muddy Waters Research, an investor research firm and hedge fund, and became known for alleging and documenting fraudulent accounting practices in publicly traded Chinese companies that were trading in North America, and as a short-seller.{{cite news |last1=Celarier |first1=Michelle |title=Are Activist Short Sellers Misunderstood? |url=https://www.nytimes.com/2022/02/12/business/dealbook/are-activist-short-sellers-misunderstood.html |work=The New York Times |date=February 12, 2022}}{{cite news |last1=McMillan |first1=Alex Frew |title=Muddy Waters’ Carson Block: ‘I’m Proud of the Impact We’ve Had’ |url=https://www.cnbc.com/2011/07/18/muddy-waters-carson-block-im-proud-of-the-impact-weve-had.html |work=CNBC |date=July 18, 2011}}

He targeted Chinese forest plantation operator company Sino-Forest in 2011, accusing it of overstating its timber holdings. The company ultimately filed for bankruptcy.{{cite news |last1=La Roche |first1=Julia |title=explains how he picks his targets |url=https://finance.yahoo.com/news/activist-short-seller-carson-block-135839575.html |work=Yahoo |date=February 18, 2016}}

In 2011, Block was ranked as a 50 Most Influential Thinker by Bloomberg Markets.{{cite web|title=Bloomberg Markets Most Influential 50|url=http://images.businessweek.com/slideshows/20110906/bloomberg-markets-most-influential-50#slide42|archive-url=https://web.archive.org/web/20110923185212/http://images.businessweek.com/slideshows/20110906/bloomberg-markets-most-influential-50#slide42|url-status=dead|archive-date=September 23, 2011|publisher=Bloomberg L.P|accessdate=14 January 2013}}

Block was featured in the 2015 book by Richard Teitelbaum entitled The Most Dangerous Trade: How Short Sellers Uncover Fraud, Keep Markets Honest, and Make and Lose Billions.{{cite news |title=Carson Block on the Short-Selling Market |url=https://www.bloomberg.com/news/audio/2021-05-28/carson-block-on-the-short-selling-market-podcast-kp8otkxa |work=Bloomberg |date=May 28, 2021}} In September 2017, he initiated a private lawsuit against Equifax, accusing it of neglecting to safeguard his personally identifiable information.{{Cite web|url=https://www.cnbc.com/2017/09/18/short-seller-carson-block-personally-sues-equifax-over-cyberbreach.html|title=My $500,000 lawsuit over the Equifax cyberbreach is personal, says short-seller Carson Block|website=cnbc.com|access-date=2020-02-12|date=2017-09-17}} He appears in the 2017 financial documentary The China Hustle, outlining his research into securities fraud of Chinese companies through Muddy Waters.{{cite news |last1=Block |first1=Carson |title=Yes, China Does Cheat In Trade - The Rest Of The World Needs To Wake Up |url=https://www.forbes.com/sites/cblock/2018/03/13/yes-china-does-cheat-in-trade-the-rest-of-the-world-needs-to-wake-up/#5a11d7f6ed2f |work=Forbes |language=en}} In early 2018, he settled a case with St. Jude Medical Inc.{{Cite web|title=UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION AND REPORT BY EXEMPT REPORTING ADVISERS|url=https://reports.adviserinfo.sec.gov/reports/ADV/281411/PDF/281411.pdf|url-status=live|access-date=2021-12-07|archive-url=https://web.archive.org/web/20210428131853/https://reports.adviserinfo.sec.gov/reports/ADV/281411/PDF/281411.pdf |archive-date=2021-04-28 }}

As of April 2021, eight of the companies that Block had exposed as being fraudulent had been delisted from stock exchanges, and two other such companies had settled charges with their regulators.{{cite news |last1=Celarier |first1=MIchelle |title=The Rage of Carson Block |work=Institutional Investor |date=April 19, 2021}} Over the prior five years, Muddy Waters had annualized returns of 19% (after a management fee (2.5%) and a performance fee (30%)).

In 2022, Block wrote a white paper entitled "Distorting the Shorts," in which he said that Columbia associate professor Joshua Mitts, who had authored research about short sellers which argued that some short activism was market manipulation, had written research that was “greatly flawed, possibly to the point of being fraudulent”.{{cite news |last1=Celarier |first1=Michelle |title=The DOJ’s Short-Seller Probe Was the Star of a Debate Between Carson Block and a Former SEC Commissioner |url=https://www.institutionalinvestor.com/article/2bstnzuzcpd77whzyl98g/culture/the-dojs-short-seller-probe-was-the-star-of-a-debate-between-carson-block-and-a-former-sec-commissioner |work=Institutional Investor |date=July 12, 2022}} He called the work by Mitts "a non-empirical, conflict-laden polemic based on misrepresentation, selective presentation of data, and lack of academic integrity. He submitted the paper to the Securities and Exchange Commission, among others.{{cite news|url=https://www.institutionalinvestor.com/article/2bstm0rrcqbkfd44m9z40/culture/muddy-waters-carson-block-takes-on-short-and-distort-author-josh-mitts |last1=Celarier |first1=Michelle |title=Muddy Waters’ Carson Block Takes on ‘Short and Distort’ Author Josh Mitts The short seller’s new white paper lays out the flaws and conflicts in the Columbia University professor’s research. |work=Institutional Investor |date=February 23, 2022}}{{cite news |last1=Hoffman |first1=Liz |last2=Korn |first2=Melissa |title=Carson Block’s Latest Short Target Is a Columbia Law Professor |url=https://www.wsj.com/us-news/education/carson-blocks-latest-short-target-is-a-columbia-law-professor-11647658318 |work=The Wall Street Journal |date=March 19, 2022}}

{{Reflist}}

• Carson Block, Muddy Waters Capital LLC [https://www.sec.gov/comments/4-758/4758-20117650-270472.pdf "Distorting the Shorts; A refutation of Joshua Mitts’ “Short and Distort” (2020)], Securities and Exchange Commission, February 23, 2022.

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Category:1977 births

Category:Living people

Category:American finance and investment writers

Category:American financial analysts

Category:American hedge fund managers

Category:American whistleblowers

Category:Businesspeople from Shanghai

Category:Jones Day people

Category:People from Summit, New Jersey

Category:University of Southern California alumni

Category:Chicago-Kent College of Law alumni

Category:American businesspeople

Category:21st-century American businesspeople