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Game Over Sino Forest

Tyler Durden's picture


Just released from The Ontario Securities Commission:

R.S.O. 1990, c. S.5 as amended

- and -



(Section 127(1) & (5))

    WHEREAS it appears to the Ontario Securities Commission (the "Commission") that:

  1. Sino-Forest Corporation (“Sino-Forest”) is a publicly traded Canadian company and a “reporting issuer” in Ontario and other provinces, as that term is defined in section 1(1) of the Securities Act, R.S.O. 1990, c. S.5, as amended (the "Act");
  2. Allen Chan (“Chan”) is Chairman and Chief Executive Officer (“CEO”) of Sino-Forest;
  3. Albert Ip (“Ip”) is the Senior Vice President Development and Operations North–East and South-West China of Sino-Forest;
  4. Alfred C.T. Hung (“Hung”) is Vice-President Corporate Planning and Banking of Sino-Forest;
  5. George Ho (“Ho”) is Vice-President Finance of Sino-Forest;
  6. Simon Yeung (“Yeung”) is Vice President - Operation within the Operation / Project Management group of Sino-Panel (Asia) Inc., a subsidiary of Sino-Forest (“Yeung”);
  7. Since 2003, Sino-Forest has raised approximately $2.986 billion from public investment and/or debt securities issues including four public offerings between 2004 and 2009 which approximately raised $1.05 billion;
  8. Sino-Forest has over 150 subsidiaries, the majority of which are registered in the British Virgin Islands and Peoples Republic of China (“PRC”);
  9. Sino-Forest’s operations are predominately in the PRC and its management has offices in Hong Kong primarily and also in the PRC and Ontario;
  10. Staff of the Commission is conducting an investigation into the activities and business of Sino-Forest and its subsidiaries and their management;
  11. The Independent Committee of Sino-Forest has also been conducting an investigation into the activities and business of Sino-Forest and its subsidiaries and their management. As a result, Sino-Forest has recently suspended Ho, Hung, and Yeung temporarily and curtailed Ip’s duties and responsibilities.
  12. Sino-Forest, through its subsidiaries, appears to have engaged in significant non-arm’s length transactions which may have been contrary to Ontario securities laws and the public interest;
  13. Sino-Forest and certain of its officers and directors appear to have misrepresented some of its revenue and/or exaggerated some of its timber holdings by providing information to the public in documents required to be filed or furnished under Ontario securities laws which may have been false or misleading in a material respect contrary to section 122 or 126.2 of the Act and contrary to the public interest;
  14. Sino-Forest and certain of its officers and directors including Chan appear to be engaging or participating in acts, practices or a course of conduct related to its securities which it and/or they know or reasonably ought to know perpetuate a fraud on any person or company contrary to section 126.1 of the Act and contrary to the public interest;

    AND WHEREAS, the Commission is of the opinion that the time required to conclude a hearing could be prejudicial to the public interest as set out in section 127(5) of the Act;

    AND WHEREAS the Commission considers it to be in the public interest to make this order;

    AND WHEREAS by Authorization Order made July 14, 2011, pursuant to subsection 3.5(3) of the Act, each of Howard I. Wetston, James E. A. Turner, Kevin J. Kelly, James D. Carnwath, Mary G. Condon, Paulette L. Kennedy, Vern Krishna, Christopher Portner and Edward P. Kerwin, acting alone, is authorized, to exercise the powers of the Commission under the Act, subject to subsection 3.5(4) of the Act, to make orders under section 17 of the Act.

    IT IS HEREBY ORDERED that, pursuant to clause 2 of section 127(1) of the Act that all trading in the securities of Sino-Forest shall cease;

    IT IS FURTHER ORDERED that pursuant to clauses 7 and 8 of section 127(1) of the Act that Chan, Ip, Hung, Ho and Yeung resign any and all positions that they hold as a director or officer of Sino-Forest or any other registrant and that they are prohibited from becoming or acting as director or officer of an issuer;

    IT IS FURTHER ORDERED that pursuant to clause 2 of section 127(1) of the Act that all trading by Chan, Ip, Hung, Ho and Yeung in securities shall cease;

    IT IS FURTHER ORDERED that, pursuant to section 127(6) of the Act that this order shall take effect immediately and shall expire on the fifteenth day after its making unless extended by order of the Commission.


    DATED at Toronto this 26th day of August, 2011.



So.... Wellington doubling down on Sino Forest shares after they knew the company was fraud was probably not the smartest idea? What excuse do they have for this fiasco.

Or what about billionaire Richard Chander?

Also, as a reminder, how many of these "analysts" who held Sino Forest at a "Buy" as of June 2, or the day of the Muddy Waters report, have been fired?


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Fri, 08/26/2011 - 09:38 | 1603659 Flakmeister
Flakmeister's picture

My, my, how the mighty have fallen...

How the fuck do you loose $500,000,000 bucks on something like this?

Fri, 08/26/2011 - 09:39 | 1603668 VisualCSharp
VisualCSharp's picture

Simple, you just untie it.

Fri, 08/26/2011 - 09:41 | 1603681 TheTmfreak
TheTmfreak's picture

Can't wait to see a Muddy Waters "we told you morons" article.

Fri, 08/26/2011 - 09:51 | 1603739 Fish Gone Bad
Fish Gone Bad's picture

Muddy Waters.  Upstanding citizen, patriot.

Fri, 08/26/2011 - 09:59 | 1603749 hedgeless_horseman
hedgeless_horseman's picture

Here's to you, Carson.

Gan bei!

Fri, 08/26/2011 - 10:04 | 1603794 oogs66
oogs66's picture

here's to you ontario sec commission - better late than never like our own sec

Fri, 08/26/2011 - 10:15 | 1603837 John Law Lives
John Law Lives's picture

I don't know what brand of drink that is, but it looks refreshing!

If it were Talisker 10-year Distiller's Reserve Single Malt Scotch, I could go for a dram.

Fri, 08/26/2011 - 10:15 | 1603906 TheTmfreak
TheTmfreak's picture

I have a bottle of 18 year Yamazaki single malt calling my name at home. Perhaps i'll have a dram of it tonight....

I keep trying to tell myself to quit drinking, but every weekend i forget about the previous weekend and just remember how much i love the taste of great drinks.

Fri, 08/26/2011 - 11:02 | 1604246 Smiddywesson
Smiddywesson's picture

Youngster.  If it's only weekends, you have 20 more years of hard drinking ahead of you.


Fri, 08/26/2011 - 09:53 | 1603744 ManufacturedOpinion
ManufacturedOpinion's picture

Muddy Waters is da bomb.

What great analysis they produce.

Almost as good as ZH itself!

BTW ... SPRD (another muddy waters target) is ripe for shorting (again).  Just reach in the till and take out a few dollars for yourselves.  Be careful though - it's one of the most manipulated stocks on the planet, methinx.




The only thing the USA manufactures these days is YOUR OPINION !!

Fri, 08/26/2011 - 09:58 | 1603768 Careless Whisper
Careless Whisper's picture

how many of these "analysts" who held Sino Forest at a "Buy"...  have been fired?

fired? bwahahahahaha. how many have been promoted for getting suckers to buy the stock?


Fri, 08/26/2011 - 10:02 | 1603782 pods
pods's picture

Best tagline ever!

Fri, 08/26/2011 - 11:44 | 1604451 JW n FL
JW n FL's picture


Fri, 08/26/2011 - 09:41 | 1603683 brew
brew's picture

muddy waters...

Fri, 08/26/2011 - 09:44 | 1603703 InconvenientCou...
InconvenientCounterParty's picture

Ask Warren Buffet after today's close.

Fri, 08/26/2011 - 09:50 | 1603733 Flakmeister
Flakmeister's picture


Fri, 08/26/2011 - 10:01 | 1603778 DaveyJones
DaveyJones's picture

con men are more renewable than trees

Fri, 08/26/2011 - 12:03 | 1604526 russki standart
russki standart's picture

Sino Forest reminds me of the BreX scam in many ways. In 2005, I asked one of my friends if I should play Sino Forest. He suggested that it may offer good trading opportunities, but it was a pure pump and dump play.  Like BreX,  Sino was likely to be a quick play to separate suckers from money, but the scam far exceeded the expectations of the most optimistic players.  What I find amusing is why anyone would invest in any of the chinese fraudcaps in the first instance. A superficial due diligence of their markets would reveal that most listed companies routinely exaggerate assets, conceal blatant conflicts of interest, and inflate earnings.  It is just the way they play given rampant government corruption.

Fri, 08/26/2011 - 09:38 | 1603661 vast-dom
vast-dom's picture

Fired? Are you naive TD? Unless I missed your //sarc/ ?

Fri, 08/26/2011 - 09:39 | 1603666 lolmao500
lolmao500's picture


Fri, 08/26/2011 - 09:39 | 1603667 augie
augie's picture

give it a name...

Fri, 08/26/2011 - 09:41 | 1603682 malikai
malikai's picture


Fri, 08/26/2011 - 09:44 | 1603698 augie
augie's picture


Fri, 08/26/2011 - 11:45 | 1604454 JW n FL
JW n FL's picture


Fri, 08/26/2011 - 09:40 | 1603673 uninspired
uninspired's picture

never had this happen to me before... what happens to my short position?

Fri, 08/26/2011 - 09:50 | 1603735 foofoojin
foofoojin's picture

The same thing that always happens. Your children will pay for it.

Fri, 08/26/2011 - 09:50 | 1603737 foofoojin
foofoojin's picture

The same thing that always happens. Your children will pay for it.

Fri, 08/26/2011 - 10:39 | 1604100 Panafrican Funk...
Panafrican Funktron Robot's picture

If you sold a call, you keep the money.

If you bought a put, you're shit out of luck.

Fri, 08/26/2011 - 09:42 | 1603688 Long-John-Silver
Long-John-Silver's picture
ALLEN CHAN found shot in head, will be buried at sea. 


Fri, 08/26/2011 - 09:42 | 1603689 ManufacturedOpinion
ManufacturedOpinion's picture


funny as hell.




The only thing the USA manufactures these days is YOUR OPINION !!

Fri, 08/26/2011 - 09:55 | 1603757 EscapeKey
EscapeKey's picture

Lots of porn as well.

Fri, 08/26/2011 - 10:06 | 1603814 DaveyJones
DaveyJones's picture

that's why our economy is simply jacking off

Fri, 08/26/2011 - 09:42 | 1603690 I Told YOU So
I Told YOU So's picture

"Also, as a reminder, how many of these "analysts" who held Sino Forest at a "Buy" as of June 3, or the day before the Muddy Waters report, have been fired?"

analysts positive reccos are a very good contrary indicator when a security is going down, their customers shorted the stock on the way down and now they need to unload the stock to the stupids that actually trade using the analysts.

Fri, 08/26/2011 - 09:42 | 1603692 The Axe
The Axe's picture

well done Tyler, and muddy

Fri, 08/26/2011 - 09:43 | 1603697 snowball777
snowball777's picture

Tiimmmmmmbbberrrr, bitchez!

Fri, 08/26/2011 - 09:45 | 1603704 OuaisBla
OuaisBla's picture

Can't wait the resume of operation to Short Sino forest.

Oh... maybe I won't be allowed to short a penny stock ...

Fri, 08/26/2011 - 09:49 | 1603705 SheepDog-One
SheepDog-One's picture

But does the delegation from China still get to keep the Wu Tang Clan?

Fri, 08/26/2011 - 10:01 | 1603776 brandy night rocks
brandy night rocks's picture

The game of chess, is like a swordfight
You must think first, before you move
Toad style is immensely strong, and immune to nearly any weapon
When it's properly used, it's almost invincible


Fri, 08/26/2011 - 09:45 | 1603706 eigenvalue
eigenvalue's picture

But SPRD, which MW suggested could be another fraud is still at $16. Higher than the price on the day before MW issued its open letter.

Fri, 08/26/2011 - 09:47 | 1603710 WiretapWilly
WiretapWilly's picture

Impossible.  Wasn't everyone just falling overthemselves about how awesome the Canadian banking sector was?  Those guys know what they are doing obv!

Fri, 08/26/2011 - 10:10 | 1603860 Terminus C
Terminus C's picture

You should have seen the stink the Canadian MSM made when this report came out.

"Oh, Sinoforest has been doing business in Canada for all these years. It is obvious that these allegations are false... Blah blah blah."

ZH information gets the Canadian MSM in as much of a tizzy as the US MSM. I think the reason for the Globe and Mail 'attack' on ZH was carried out because of Sinoforest as well.

Fri, 08/26/2011 - 09:47 | 1603711 irishlink
irishlink's picture

all these banks that are concentrating in Asia particularly China must now start scrambling. How many of these duds have they fought each other to finance? HSBC?

Fri, 08/26/2011 - 09:47 | 1603713 Larry Darrell
Larry Darrell's picture

I'm sure Tyler was busy and just forgot, so



Fri, 08/26/2011 - 09:55 | 1603758 orangedrinkandchips
orangedrinkandchips's picture

ok Larry,


I am trying to find a clip of a cartoon we use to watch as is the one of a dog- cant remember his name- but he is trying to kill some other character by cutting down a tree...he cuts it so it is about to fall....then takes the innocent look with his hands behind his back.


The funny part of it is he is like TIMMMM....ber. The tree falls on him but the sound of the voice is classic....the BER! is so nasaly it is it should be..the TIM is in regular voice but the BER is really as if the tree fell on him.....


it's hilarious and I cant find it....

Fri, 08/26/2011 - 09:48 | 1603715 HoardeBilly
HoardeBilly's picture


Fri, 08/26/2011 - 09:49 | 1603722 HoardeBilly
HoardeBilly's picture

Or even better:

<singing> Ohhhhh, I'm a lumberjack and I'm okay...

Fri, 08/26/2011 - 09:48 | 1603718 Pool Shark
Pool Shark's picture

Is it time to break out the:

DOW 10K hat again?

Fri, 08/26/2011 - 09:49 | 1603720 Ausperity
Ausperity's picture

Black Swan :)

Fri, 08/26/2011 - 09:49 | 1603723 I Told YOU So
I Told YOU So's picture

might be prudent to buy (hedge for gold going down hard after bernank) a few gll calls

Fri, 08/26/2011 - 09:52 | 1603745 SheepDog-One
SheepDog-One's picture

Gold will still recover nicely after chasing out the trader/speculators....remember, we have NOT printed any LESS no matter what the clownass says today.

Fri, 08/26/2011 - 11:54 | 1604485 JW n FL
JW n FL's picture

Sheep it is ok to sell high and buy back more low..

the more Gold You have! the happier I and all the rest of the fight club family will be!

More Gold for us and less for them! use the system to your advantage..

I never sell everything, the most I pay with is 25%.. 25% being sold is my MAX! but use whatever amount you are comfortable with..

How many oz.'s of gold needed to be sold at $2,100 an eagle to pick up a free Eagle at $1850?

why not do that in multiples of 5 or ten oz.'s? free gold for you and less for them!!

FUCK THE BANKSTERS!! use there bullshit for your benefit!! you can do $10k - $20k easily with very little risk to you and you dont need pay anyone to handle it.. it is good to get out and meet some gold dealers face to face in your local.

My Best to You and Yours SheepDog-One, JW

Fri, 08/26/2011 - 10:49 | 1604160 Panafrican Funk...
Panafrican Funktron Robot's picture

Agreed, look at how far it's fallen post speech.


Oh, wait.

Fri, 08/26/2011 - 09:50 | 1603725 dwdollar
dwdollar's picture

It was trading at $4.81 yesterday?  Can somone say 'dumb f'king money'?

Fri, 08/26/2011 - 09:53 | 1603750 SheepDog-One
SheepDog-One's picture

Robo and Leo probably own it.

Fri, 08/26/2011 - 10:02 | 1603779 doomandbloom
doomandbloom's picture

Havent seen Leo in a while.....but i dont miss him that much since Roubini has taken up his place...

Fri, 08/26/2011 - 12:02 | 1604522 JW n FL
JW n FL's picture

<-------- Roubini Teaches Young People how to fuck up multi-generational wealth becuase he has NO! Money of his own to back up his teachings with!

<-------- You like Roubini and finger painting with your own shit.


Tyler says Roubini 20 year old (daddy issues) girl friend (who blocked me on Twitter 2 days ago) seems to know have a thing for Tyler as well.

I think we all should take the time to let Roubini know what we think of him and Greenspan / Krugman and / or add your least favorite lying sack of shits name here ________________ .

Fight Club makes money and tells the truth!

Fuck polite I want performance!

Fri, 08/26/2011 - 09:50 | 1603726 buzzsaw99
buzzsaw99's picture

It only took regulators three months after the crash to figure out that something might be amiss. Great job!

Fri, 08/26/2011 - 09:51 | 1603740 monopoly
monopoly's picture

No surprise to us here. We had a very early heads up. Never touch those anyway.

Fri, 08/26/2011 - 09:51 | 1603742 Flakmeister
Flakmeister's picture

In all fairness, the BMO guy had it at Market Perform.... That may prove to be a very good call....

Fri, 08/26/2011 - 09:52 | 1603746 IMA5U
IMA5U's picture





I see no forest     yeah

Fri, 08/26/2011 - 09:52 | 1603747 urbanelf
urbanelf's picture

Only slightly dumber than buying the 10 year at 2.23%.

Fri, 08/26/2011 - 09:57 | 1603766 buzzsaw99
buzzsaw99's picture

or gold at $1900?

Fri, 08/26/2011 - 10:03 | 1603786 I Told YOU So
I Told YOU So's picture

the bond market will tell where the big money is going in about 5 minutes, follow agg, tbt.

Fri, 08/26/2011 - 10:13 | 1603893 walküre
walküre's picture

Well not into bonds.

Fri, 08/26/2011 - 09:57 | 1603762 FranSix
FranSix's picture

Looks like money doesn't grow on trees.


GORO under surveillance:

Fri, 08/26/2011 - 09:58 | 1603769 lizzy36
lizzy36's picture

Sino forest raised $3.05B in capital over the years.

Wonder if the millions in fees paid to the above noted banks/brokerdealers for their buy ratings will be returned to investors as a mea culpa?

Fri, 08/26/2011 - 10:02 | 1603784 Hephasteus
Hephasteus's picture

You are so cheeky today. :)

Fri, 08/26/2011 - 12:04 | 1604529 JW n FL
JW n FL's picture

That was a FANTASTIC! FUNNY!! I needed that! Score one Lizzy!

Fri, 08/26/2011 - 10:05 | 1603812 glenlloyd
glenlloyd's picture

surely you jest!

What I wonder is how much it cost Sino Forest to get a place on these firms' buy lists?

Fri, 08/26/2011 - 10:04 | 1603798 djsmps
djsmps's picture

"Wellington, a closely held partnership founded in 1928, serves as an investment adviser to more than 1,950 institutions in 50 countries, according to its website."

Those 1950 institutions might want to consider changing advisors.

Fri, 08/26/2011 - 10:11 | 1603877 rubyruffruff
rubyruffruff's picture

bravo muddy waters...bravo

Fri, 08/26/2011 - 10:13 | 1603896 YesWeKahn
YesWeKahn's picture

When you talk numbers, make sure that you also talk unit. People get excited too quickly.

Fri, 08/26/2011 - 10:16 | 1603909 walküre
walküre's picture

They should look closely at Richard Chander's statements after June 2nd as well. Either the guy is a complete idiot or he's pumped the stock because he was heavily invested and needed the upside to sell-out. Officially he says he's been buying the stock but there's no proof of that unless they go through is trading records. Good luck with that when most of the trading on this POS was definitely out of reach of authorities.

Disclaimer: I could see the non-existing contract forest for the Muddy Water trees.

Fri, 08/26/2011 - 10:34 | 1604075 stateside
stateside's picture


Whoopsie LOL

The Globe and Mail attempts to identify Canadian stocks billionaire investor Warren Buffett might buy in its Friday, Aug. 26, edition. The Globe's John Heinzl writes in the Number Cruncher column that Mr. Buffett aims to buy solid businesses at "fair" prices and often holds stocks for decades, Coca-Cola and American Express being two examples. He summed up his investing philosophy in his 1996 letter to Berkshire Hathaway shareholders: "Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, 10 and 20 years from now. Over time, you will find only a few companies that meet these standards -- so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines. If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes." Stocks The Globe believes fit Mr. Buffett's investing criteria are Bird Construction ($10.55), Home Capital Group ($47.19), Sino-Forest ($4.81), Alimentation Couche-Tard ($28.60) and Saputo ($38.48).


Fri, 08/26/2011 - 12:22 | 1604602 beatus12
beatus12's picture

well done Zerohedge, now

only a hundred plus other

entities listed on exchanges

from the same region that

need the same evaluation


Fri, 08/26/2011 - 16:23 | 1605492 FJ
FJ's picture

Block says  Sino Forest is going to zero and that he's still short.

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