Month: August 2020

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Article: €22Bn Hedge Fund H2O, Majority-Owned by Natixis, Ordered to Freeze Funds. Fishy Smells Emanate

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€22Bn Hedge Fund H2O, Majority-Owned by Natixis, Ordered to Freeze Funds. Fishy Smells Emanate

Nick Corbishley, 31 August 2020

H2O Asset Management — a UK-based hedge fund, majority-owned by French investment bank Natixis — just gated a series of its funds due to illiquidity of its holdings. On Friday evening, France’s chief market regulator, Autorité des marchés financiers (AMF), instructed the firm to close three of its funds due to “valuation uncertainties” resulting from their exposure to unlisted securities linked to the controversial German financier Lars Windhorst.

Besides the three funds indicated by AMF, H2O closed another five funds containing holdings of similarly illiquid assets, with the result that roughly half of the asset management firm’s entire portfolio of assets — €21.7 billion, according to the company’s website — is now under wraps. Trapped investors cannot access their funds, and will be unable to do so for at least the next four weeks, during which time the company will try to sell off the illiquid assets. Continue reading “Article: €22Bn Hedge Fund H2O, Majority-Owned by Natixis, Ordered to Freeze Funds. Fishy Smells Emanate”

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Article: Small Landlords, Tenants, Lenders, Governments Grapple with “Extend-and-Pretend Forevermore”

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Small Landlords, Tenants, Lenders, Governments Grapple with “Extend-and-Pretend Forevermore”

Nick Corbishley, 26 August 2020

The British public was recently treated to an exemplary example of what Wolf Street likes to call “extend and pretend forevermore.” At the end of last week, the UK government extended its ban on tenant evictions by four extra weeks. First launched in late March, the ban was supposed to last three months, but it was extended by an additional two months in June. Now, it’s been extended til late September.

In other words, tenants will have been safe from legal eviction for six months so far this year. The government also lengthened the minimum period of notice a landlord has to give before evicting a tenant from two months to six months. Continue reading “Article: Small Landlords, Tenants, Lenders, Governments Grapple with “Extend-and-Pretend Forevermore””

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Article: A famed short-seller explains why he’s betting big against a Chinese tech stock that has seen a ‘crazy stupid’ 320% gain in 2020

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A famed short-seller explains why he’s betting big against a Chinese tech stock that has seen a ‘crazy stupid’ 320% gain in 2020

Saloni Sardana, 22 August 2020

Famed short-seller Andrew Left is aggressively shorting a “crazy stupid” Chinese stock that has gained more than 320% on the New York Stock exchange in 2020, as he believes it has exaggerated its earnings and will eventually be delisted. The activist short-seller and founder of Citron Capital, told Business Insider that he believes that the earnings of GSX Techedu are grossly inflated “anywhere between 50 to 80%.” GSX, which is an online education provider, has surged despite a number of claims by various short-sellers casting doubt on the company’s performance. Continue reading “Article: A famed short-seller explains why he’s betting big against a Chinese tech stock that has seen a ‘crazy stupid’ 320% gain in 2020”

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Article: Apple and Tesla distort S&P 500 performance, says Jim Cramer

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Apple and Tesla distort S&P 500 performance, says Jim Cramer

Ben Lovejoy, 21 August 2020

CNBC Mad Money host Jim Cramer says that strong performance by Apple and Tesla has led to a misleading impression of the performance of S&P 500 stocks.

Cramer said that the S&P has grown more than 50% since its coronavirus low in March, but this is mostly due to the performance of tech giants, with Apple and Tesla particularly influential …

Continue reading “Article: Apple and Tesla distort S&P 500 performance, says Jim Cramer”

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Article: Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on GFL Environmental Inc. (NYSE/TSX: GFL)

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Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on GFL Environmental Inc. (NYSE/TSX: GFL)

PRNewswire, 18 August 2020

Based on an extensive forensic analysis and holistic review of GFL’s accounting practices, financial controls and reporting, and corporate governance, Spruce Point believes that without access to new capital, the Company’s shares are worthless and likely uninvestable for institutional investors. GFL’s executives have not only fostered what appears to be an extremely aggressive and opaque business model, but they have either deliberately concealed, or inattentively omitted, past failures and questionable business connections. Our report’s textual and visual evidence shows that Chief Executive Officer Patrick Dovigi has obfuscated his connections to what some observers have dubbed “organized crime” figures. We have also discovered that former General Counsel and current Senior Vice President Joy Grahek has failed to disclose her role advising Philip Services Corporation (“Philip Services”), which was a dual-listed roll-up of metal and industrial businesses that collapsed, was pursued by the Ontario Securities Commission, settled $80 million in shareholder claims, and was described as a “house of cards” and “one of the great unprosecuted frauds in Canadian business history.”
Continue reading “Article: Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on GFL Environmental Inc. (NYSE/TSX: GFL)”

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Article: GFL Environmental, Inc.: Investment Research Report

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GFL Environmental, Inc.: Investment Research Report

SPRUCE POINT REPORT, 18 August 2020

After conducting a forensic financial and accounting review (inc. multiple former employees interviews), Spruce Point believes shares of GFL Environmental (TSX/NYSE: GFL), a cash degenerative North American roll-up of environmental service companies, are worthless. We find GFL’s CEO Patrick Dovigi has obfuscated connections to what some observers have dubbed “organized crime” – if true, making the stock uninvestable to institutional shareholders and putting its two deals to acquire Waste Management assets and WCA Waste at risk of not receiving Dept. of Justice approval in our opinion. GFL’s executive Joy Grahek fails to disclose her role advising Philip Services (NYSE/TSX: PVH), a dual-listed roll-up of metal and industrial services that collapsed, was pursued by the OSC regulators, settled $80m of shareholder claims, and was described as “one of the great unprosecuted frauds in Canadian business history”. In our opinion, GFL’s leverage is understated by aggressive reporting of revenue and EBITDA, and free cash flow burn is understated by ~60%; this is evidenced by financial restatements without explanation, and by minimizing a material weaknesses of financial controls. We believe GFL’s debt is understated by at least C$460m. We believe its staggering C$5.6bn total debt load, and financial losses make it reliant on new capital to sustain itself, nevermind its desire to grow via increasingly expensive acquisitions. With a meaningful portion of the stock pledged as collateral for loans, we believe there is a real risk that the stock collapses and the auditor fails to sign off on GFL’s financials after reviewing the evidence we’ve amassed.
Continue reading “Article: GFL Environmental, Inc.: Investment Research Report”

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Article: Americas Gold and Silver Corporation Provides Encouraging Results From Initial Deep Level Drilling From The Galena Complex

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Americas Gold and Silver Corporation Provides Encouraging Results From Initial Deep Level Drilling From The Galena Complex

PRNewswire, 17 August 2020

Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas” or the “Company”), a growing North American precious metals producer, today is pleased to provide an update on its Galena Complex, 60% owned by Americas and 40% owned by Mr. Eric Sprott.

We are extremely excited about the initial drill results from the 5500 level that has already yielded several bonanza grades,” stated Americas President and CEO Darren Blasutti. “The initial deep drilling is targeting the 72 Vein which historically was a major contributor of ore during the peak silver production years at combined grades of over 650 g/t silver. There are two additional systems which the Company is excited about at depth including the “triple point” and deeper extensions of the 360 Complex that will be drilled during the remainder of 2020 and into 2021.”
Continue reading “Article: Americas Gold and Silver Corporation Provides Encouraging Results From Initial Deep Level Drilling From The Galena Complex”

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Article: The Dark Side of Delicious: Decoding Food Delivery Fraud on the Dark Web

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The Dark Side of Delicious: Decoding Food Delivery Fraud on the Dark Web

Amarelle Wenkert, 17 August 2020

In more ways than one, scamming a food delivery service is gateway fraud. Remember when ordering pizzas to the address of an unsuspecting victim was a staple of youthful mischief? Some of the popular food delivery fraud MOs our analysts encounter these days are not far removed from childhood pizza pranks. But what some forms of food fraud lack in sophistication, they offset in the mounting losses they cause.

From the simple practice of ordering a meal, “disposing of the evidence,” and calling to claim a refund because your food never arrived, to more complex account takeover (ATO) scams orchestrated by seasoned fraudsters, food delivery often comes with a side of fraud. A lot of what we know about food delivery fraud we discover on the dark web, where fraudsters brag about their spoils and share tips on how to hustle a hot meal. In this blog post, I’ll explore why the sector is attracting so much fraudulent activity and how it is affected by the rising ATO trend. I’ll also share the most popular MOs Riskified analysts identified on the dark web.
Continue reading “Article: The Dark Side of Delicious: Decoding Food Delivery Fraud on the Dark Web”

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Article: Turkey’s 2nd Financial & Currency Crisis in 2 Years Blossoms. Heavily Invested European Banks Look for Exit. But Not the Most Exposed Bank

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Turkey’s 2nd Financial & Currency Crisis in 2 Years Blossoms. Heavily Invested European Banks Look for Exit. But Not the Most Exposed Bank

Nick Corbishley, 15 August 2020

As the Turkish lira logged fresh record lows against both the dollar and the euro on Friday, and is now down 19% this year against the dollar, attention is turning once again to the potential risks facing lenders. They include a handful of very big Eurozone banks that are heavily exposed to Turkey’s economy via large amounts in loans — much of it in euros — through banks they acquired in Turkey. And the strains are beginning to replay those of the last currency/financial crisis in 2018. Continue reading “Article: Turkey’s 2nd Financial & Currency Crisis in 2 Years Blossoms. Heavily Invested European Banks Look for Exit. But Not the Most Exposed Bank”

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Article: South Dakota man linked to Russian spy sentenced for fraud

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Investigations Newsletter: Russian National Sentenced to Prison for $100 Million Cyber Fraud Conspiracy

Associated Press, 13 August 2020

A former conservative operative who was once romantically linked to a Russian agent was sentenced Monday to seven years in federal prison in South Dakota.

Paul Erickson pleaded guilty to wire fraud and money laundering as part of fraudulent investment schemes he operated for many years, the Argus Leader reported.

Erickson was not charged in connection to his romantic relationship with Maria Butina, who was deported in October after admitting she sought to infiltrate conservative U.S. political groups and promote Russia’s agenda. He came under the scrutiny of federal investigators who were monitoring Butina but her role in his downfall did not come up in court. Continue reading “Article: South Dakota man linked to Russian spy sentenced for fraud”

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