A bull market in a China shop
Stock manipulations, scam economics at heart of shady financial documentary
By the midpoint of this newest economic-malfeasance documentary, you may be prepared to put your money into mattresses — literally.
“There are no good guys in this story — including me,” says Dan David, co-founder of GEO Investing and the nearest thing to a white knight in director Jed Rothstein’s The China Hustle.
David, like a lot of financial types, was bullish on China after the 2008 financial meltdown; it seemed the only place with real growth potential.
Unfortunately, the closer he looked at the stock being pushed by such investment houses as ROTH and Rodman & Renshaw, the more he saw companies that were overvalued and underperforming.
The sleuthing is fascinating to watch. In one instance, surveillance of a supposed powerhouse called China Green Agriculture showed very little traffic in and out of its head office.
When a detective posing as a tea salesman asked the guy at the front gate if he could leave some free samples, he was told there were about 40 employees and a single driver, nowhere near the numbers you’d need to do the millions in business it was claiming.
It’s ultimately a bit depressing, even infuriating; in spite of David’s whistle-blowing, advocacy and even a trip to Washington, the scams continue.
Defunct Chinese companies “reverse merge” with U.S. shell corporations, winding up on
U.S. stock exchanges with little to show for it, and no one doing due diligence. Crocker Coulson, a stock promoter who pushed China Green Agriculture, talks it up and calls it “a fertilizer story.” That’s one way to describe it.