Canada Halts Trading In Sino-Forest

The NYT, via nc links:

Sino-Forest has been the subject of considerable controversy since June, when Muddy Waters Research issued a report by a short-seller, Carson Brock, that called the company a “multibillion-dollar Ponzi scheme” that was “accompanied by substantial theft.”
A reporter for The Globe and Mail of Toronto subsequently spent two weeks visiting various properties ostensibly owned or controlled by Sino-Forest and its subsidiaries. It proved to be a trek that frequently led him to nonexistent addresses and empty offices. Like Muddy Waters, the newspaper also found evidence that Sino-Forest had greatly inflated the size of its forestry assets.
After the accusations, Sino-Forest’s stock price tumbled and the hedge fund manager John Paulson, who had been one of the company’s largest shareholders, dumped his shares. His hedge fund, Paulson & Company, which had owned 35 million shares, is estimated to have lost nearly $500 million on Sino-Forest.
Neither Sino-Forest nor its public relations agency would provide comment about the order on Friday.
While Sino-Forest initially rejected the assessment of Muddy Waters and dismissed The Globe and Mail’s article, it did appoint a independent committee of directors to review the accusations. Earlier this month, it said that the review was taking longer than first anticipated because of, among other things, “challenges associated with the sourcing and verification of data in China.”

It is amazing how these Chinese frauds have been able to bamboozle so many major investors.