CARSON BLOCK

Block was born in 1977 and earned a business degree from USC in 1998 with a focus on Chinese and finance. He moved to China after college, did a short stint in investment banking, then worked with his father on equity research, a period he later called embittering.

He earned a law degree from Chicago-Kent in 2005 and practiced M&A law at Jones Day in Shanghai. He co-wrote Doing Business in China for Dummies in 2007 and even ran a self-storage business in China.

His life changed in 2011 when he founded Muddy Waters Research and published a report calling Toronto-listed Sino-Forest a multibillion-dollar fraud. The stock collapsed and the company later went bankrupt.

Muddy Waters has since triggered at least eight delistings and multiple regulatory actions worldwide.

Muddy Waters Research, Muddy Waters Capital

Block is an activist short seller. He finds companies he believes are lying about their business, bets that their stock will fall, then publishes a detailed report explaining why.

The plain version is he profits when he is right and the truth comes out. Unlike a normal short seller who just quietly bets against a stock, Block goes public and loud.

His targets usually involve accounting games, overstated assets, or outright fraud. He does deep forensic digging, sometimes visiting factories and counting inventory himself.

Sino-Forest is the case that made him. In June 2011 Muddy Waters published a report calling the Chinese forestry company a fraud and a Ponzi scheme that overstated its timber holdings.

The stock cratered, wiping out roughly $3 billion in market value. Sino-Forest was delisted from the Toronto Stock Exchange in 2012 and filed for bankruptcy protection.

Legendary investor John Paulson reportedly lost heavily on the long side, which made the call even more talked about.

Not every Muddy Waters bet lands, and short selling means you can be right on the fraud but wrong on the timing. Targeted companies fight back with lawsuits, PR campaigns, and personal attacks, and some Muddy Waters shorts have been slow to pay off or gone against him for long stretches.

The lesson Block lives with is brutal. Being correct is not enough if the market takes years to agree, and the stock can crush you in the meantime.

Block believes markets are full of companies whose accounting hides the truth, and that short sellers are the only people digging for it. He sees his job as holding people accountable when the official systems fail.

He is blunt that some of his best work involves conduct that violates the spirit of the law but not the letter of it. His philosophy is deeply skeptical.

Assume the story is too good, then check.

Block keeps his family life private. He spent formative years in China, which shaped both his career and his early targets.

Block earned a bachelor's degree in business administration from the University of Southern California in 1998, focused on Chinese and finance. He later earned a law degree from Chicago-Kent College of Law in 2005.

The mix of Mandarin, finance, and law is exactly what let him pick apart the China-based companies that made his name.