The Following Sino Forest Sell-Side Analysts Should Be Terminated Immediately

Tyler Durden's picture

As we pointed out the day after we broke the news that Paulson is about to suffer a historic loss on the Sino Forest Chinese fraud (a loss that has now been realized), the Paulson analyst who suggested this humiliating investment for the man who is now best known for hiring Paolo Pellegrini, have long since seen the pink slip. The story however does not end there: below we present again the sell side analysts who had Buy and Outperform ratings on what is now the biggest financial ponzi fraud since Madoff. In order to protect the reputation of such host firms as Raymond James, Dundee Securities, TD Newcrest, Credit Suisse, RBC, BMO and Scotia Capital, we urge the management teams to immediately terminate the following sell-side "analysts" whose work on TRE.TO was nothing but piggybacking on groupthink, doing absolutely no actual due diligence, costing clients billions in losses, and whose names will now forever be enshrined in the pantheon of "most worthless sellside analysts" ever.

TRE.TO analyst coverage as of June 3.

In fact, the termination round should start with Dundee's Richard Kelerats:

Funny how quick Kelertas changes his opinion on a topic in which he was absolutely certain as recently as 6 days ago:

Mr. Kelertas didn’t mince his words. From the get-go his goal was to explain “why Muddy Waters’ research is a pile of crap” and he went about his attack by addressing specific issues that Mr. Block has raised.

“All indications are that there are no fraudulent activities, no overstatements. We believe in the company. We trust the company after they have come through with various disclosures,” Mr. Kelertas said.

If Sino-Forest has done nothing wrong, why hasn’t its stock rebounded from its devastating drop? Mr. Kelertas has a theory. For starters, before the report was released, markets were already nervous because QE2 is winding down and there are fears of a Chinese economic slowdown. But more important, there was a growing short position in Sino-Forest’s stock so investors were primed to jump at anything overly negative. Plus, allegations of wrongdoing against China Forest Holdings Co. Ltd., another Chinese forest plantation operator, broke earlier this year, so investors had that weighing on their minds.

Or, and here's a thought, sellside analysts are worthless, piggybacking, groupthink-pursuing pieces of s....cum?


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NoBull1994's picture

Probably more than a few buyside analysts as well.

quintago's picture

To Laprade's credit, the rating was "under review". How many sell/strong sell ratings are handed out? Not many, therefore they are nearly all worthless. I agree though that these are are the bottom of the pile.

Tyler Durden's picture

It was not under review 24 hours earlier when the MW report hit. This was just the first rating to be put to N/A

quintago's picture

In that case let's strap a jar with a rat inside to his face, apply heat to the end of the jar and allow the rat to chew its way out.



disclaimer: I'm joking

Popo's picture

Please.  Most analysts are 26 year old sniveling douches out of B-school who have zero real-world experience and are told they're smart by their bosses.   They really have no idea how retarded they are.   It's not so much malicious behaviour as much as it is plain cluelessness.  Most don't realize they're part of a racket, because they're (a) not particularly smart and (b) colossally inexperienced.

The tragedy of course, is that people listen to them.

I'll never forget sitting in a meeting with a young analyst who truly thought she was an expert on an industry because she had prepared for a couple of weeks,  written a report -- and of course, gone to Princeton.  In this case, she was opining on the video game industry to a room full of industry veterans.  It was horrifying.  Never mind the fact that she had never played a video game.  She was 100% wrong on both the financial and strategic analysis,  and had no idea how little she herself knew.  ...but.. Everyone scribbled notes and took her word for it because she had the pedigree of a big bank name behind her.

Her analysis proved to be disastrous.  

She's a managing director now.

Arius's picture

now, this about sums it all up ....

lizzy36's picture

One wonders where the "Conviction Buy" Enron analysts landed?

SparkyvonBellagio's picture


riley martini's picture

 Isn't Sino a Canadian Corp I would bet most of the Chinsee RMs are instigated by criminals in US banking.

 On another subject Moodys just upgraded Nigerian lottery winners to AAA positive . Buffet and Paulson says it's a safe investment for Widows and Orphans safer than A Goldman MBS.

snowball777's picture

Those aren't analysts...they're fluffers.

alien-IQ's picture

"most worthless sellside analysts" AKA "future White House economic advisors"

LoneStarHog's picture

In order to protect the reputation of such host firms as Raymond James, Dundee Securities, TD Newcrest, Credit Suisse, RBC, BMO and Scotia Capital,...


BWHAHAHAHAHAHAHA ..."reputation"? ... "protect"? ... these are WALL STREET FIRMS

Terminus C's picture

Actually, four of them are Bay Street firms.

Six of one, half dozen of the other.

SheepDog-One's picture

'Protect' their phoney baloney jobs as market manipulators is whats really at stake!

Cdad's picture

Wow Tyler, this is dangerous ground.  If we open this can of worms, think of all the other analysts who will also have to be terminated for other ridiculous calls on absurd bubble "stawks."

But I am with you because I know that real capital will not form in a banking system as putrid as ours.  Until such time as our nation commences with the delivery of massive piles of pink slips in the nonproductive and criminal banking sector, we can all look forward to more of the Summer of Recovery....a lesson Europe is learning just ahead of us.

There will be no restoration of confidence until the perpetrators of our economic demise meet justice and the banking system is cleared.

SheepDog-One's picture

Everywhere we look, EVERYONE should be terminated! Look at all the banks that had strong buys on Enron till the day it collapsed. Any 'Pets . com sell side analysts still around? Sure they ALL are! How about Moodys and S&P now Johny on the spot about Greek and Spanish banks....too bad they flat-out completely MISSED the entire bank failure disaster of '08 though!

These people are all ass hats!

Cdad's picture

Agreed, Dog.

The story of corruption here in "once free market capitalistic" America is a long story.  As discussed recently by Charles Smith, corporate corruption is rampant, with high level executives essentially selling the US job market overseas while simultaneously looting the value of publicly traded stocks via their absurd option grants.

Add to this the hired hedge fund effect, that of ramping stocks up so as to facilitate insider selling and millionaire making, and you have a market that has rotted from the inside and is of very little value.  Of course, it is no surprise that America has lost her moral compass.  I don't think morality is covered on Dancin' with the Stars.

America has been hollowed out by bankers, "blue chip" corporations, and politicians.  Servicing short term greed has dealt a death blow to principles, morality, and the rule of law.

And on most days, it seems like few really care.


AbandonShip's picture

I won't trust Wall St. until douchebags like Henry Blodget are gone.  Although, this D-bag may have partially redeemed himself:

Wolf in the Wilds's picture

Ah, you should add the sell-side credit analysts as well!  They have done a "bang up" job of getting this credit into the Asian HY bond index.  Due diligence before a bond issue?  What is that these days?  And now, these investment banks are bringing out even more liquidity starved Chinese HY corporates in the the market.  Has anyone done a proper due-D on any of these new issuers?

Your guess is as good as mine.

Michael Victory's picture

T calls for the axe.


firstdivision's picture

Cramer's proteges.

RowdyRoddyPiper's picture

Dream on Tyler...these clowns with CFAs and MBA's will keep their jobs because they acted along with their unable to think independently classmates. Brokers don't want truly innovative and independent threatens them. An ability to get along and go along is valued over all other traits.

Remember the idiot "analyst" at Bank of Montreal Nesbitt Burns who exclaimed "he had seen the gold!" at the Bre-X site in Indonesia...well, he still works there.

Greeny's picture

Now it's probably time to buy and run it back to $20/share :)))

I'll be watching this Pig..

beanieville's picture

They should have bought Pandora instead.

Josh Randall's picture

Fat, drunk and stupid is no way to go through sell-side analyst life, son. 

strannick's picture

Rich, unaccountable and stupid seems to be a very acceptable way for these folks to go through life.

I am a Man I am Forty's picture

wonder what Scotia Capital is going to come up with, with their "under review" recommendation

ThisIsBob's picture

I remember Paulson teklling some congressional hearing a couple of years ago that the way he made all his nmoney was from good old fashioned hard work and analysis.  Apparently you can lose it that way too.

SheepDog-One's picture

WORTHLESS anal-cysts! 

Never believe a word any of them say!

I am a Man I am Forty's picture

like I said before, if the CFO and CEO couldn't completely discredit the muddy water report in 15 minutes (they said they needed 2 to 3 months), then this was a fraud

casey13's picture

SEC Charges Carson Block and Muddy Waters LLC in Stock Manipulation Ring
The Securities and Exchange Commission has charged Carson Block and Muddy Waters LLC in a stock manipulation ring, 6/21/2011 - Washington, D.C., June 21, 2011 — The Securities and Exchange Commission has charged Carson Block and Muddy Waters LLC in a stock manipulation ring that allegedly published false information, causing a drop in the market prices of at least three stocks and generated more than $240.2 million in illicit profits when they sold shares short then repurchased the shares after a significant decline on the market.

Additional Materials

Litigation Release No. 21053

SEC Complaint

The SEC alleges that Carson Block, who resides in Hong Kong carried out the market manipulation schemes with others he met through a stock web site, which is operated by Matthew Brown of Aliso Viejo, Calif. Block, Brown, and other participants in the schemes often timed the manipulative trading to coincide with false or misleading press releases issued by Muddy Waters LLC. The three companies were Sino Forest Corporation, Duoyuan Global Water Inc., and Orient Paper Inc.

“As we allege in our complaint, Carson Block and his accomplices around the country met through the Internet and planned to short sell the stock in the companies prior to release of the Muddy Waters Report that made allegations of impropriety, fraud, and theft. Carson Block and his associates approaches several large hedge funds and investment firms first to market their “research” and promised great returns upon the release of their “research”. The results for each of the companies that were targeted were catastrophic and have resulted in a serious loss of market value and public trust in the management of these companies. ,” said Scott Friestad, Deputy Director of the SEC’s Division of Enforcement. “Carson Block went so far as to himself write some of the misleading press releases that denigrated these stocks so they could line their own pockets with hundreds of millions of dollars.”

The SEC’s complaint, filed in federal district court in Delaware, charges six others in addition to Carson Block:

According to the SEC’s complaint, these fraudulent schemes generally followed the same pattern. In 2010, Carson Block and his accomplices arranged for large blocks of shares to sell on the open market. The vast majority of the shares sold short were done through the accounts of Muddy Waters LLC for the personal benefit of Carson Block. The defendants then notified the hedge funds and investment firms of their intention to publish their report and were paid approximately $2.7 million dollars for “research” supplied by Muddy Waters LLC. As a result shares were sold short in the days immediately prior to the release. After artificially deflating the market price of the stocks, Carson Block and his accomplices then recovered the shares the sold short on the open markets and collected the illicit proceeds.

The SEC’s complaint alleges violations of the antifraud, registration, and other provisions of the federal securities laws. The complaint seeks to have the court permanently enjoin each defendant from future violations, require disgorgement of ill-gotten gains with prejudgment interest, and impose financial penalties. Additionally, the Commission seeks to have certain defendants barred from participating in stock offerings.

Complete article available at SEC newswire.

SheepDog-One's picture

OH see a stock DROPPED in that case...cant have that. Manipulating stocks upwards is just fine, as long as the Criminal Syndicate AKA Wall St is getting their take.

The Profit Prophet's picture

And let's just forget the fact that Paulson and Goldman pulled a similar manouver with the mortgage fraud they discovered early!!!  What a f***ing joke!

T.E.I.N. everyone!

gaugamela's picture

Who is the Paulson team member PM / Analyst that recommended this to him? I would be interested to know how soon he/she got fired.

Greeny's picture

Chinese fraudsters all over US Markets look a the

Bloomberg Chinese Reverse Mergers Index

From 200 to 100 in 6 month, not bad ;)

Goldtoothchimp09's picture

so the SEC is suing because these guys exposed fraud for a living!?  that's ripe!  They should be compensated handsomely for their work!

SheepDog-One's picture

Looks like they stepped on the embedded pumper fraudsters toes! Someone shorting the crap out of a FED bubble stock...hell cant have THAT! Lets call it 'manipulation'.

lizzy36's picture

Lets face it, sell side analysts are there to preposition financing's

Sino raised $2B in equity since 2007. That is over $35m in fee. Bookrunners on the equity side were Dundee, TD, and Credit Suisse.

For a total list of deals down since 2002 see:

Goldtoothchimp09's picture

I would say Dundee, TD, and Credit Suisse did a ton of damage and should be prosecuted for perpetuating a fraud!  The Muddy Waters analysts are the only competent actors in the bunch!

SheepDog-One's picture

In other words, they are there to pre-route the 401K contribution free money into this garbage and pocket their slice.

SparkyvonBellagio's picture

LOL Now that's an 'outing'. LOL




Goldtoothchimp09's picture

Our government is conglomerate of incompentent THUGS!!!

BinAround's picture

Hey capitalists, time is money. If an analyst cannot rely on financial statements or auditors, he must verify the sources of revenues himself.  But that is impossible. He can't spend hundreds of hours. Only a 2 and 20 hedge fund could afford such investigative costs.  Investors can simply avoid Chinese companies because of widespread fraud.  But the analyst would get sued for saying "the company is probably a fraud but I haven't spend 200 hours to prove it".   

oogs66's picture

then don't cover it, don't put on a recommendation!

longontents's picture

Please.  I think the firms in question can manage the costs of adequate research.  If they can't, they shouldn't be making any recommendations in the first place.

The Axe's picture

Please add photos of Penguins!!!!

monopoly's picture

This crap just goes on and on. For me, now, this is a good time to hold a lot of American confetti. Market going nowhere. Lets see how the Greek people continue to make sure European bankers get fat pay checks and perks at their expense.

Waiting and watching for the turn in miners. They are so under valued now. But, can become more so. Slow summer so far.

cheesewizz's picture

Cant they get a computer to do the DD?  Real people just don't get it...