凯雷(Carlyle)投资集团在近日被停牌的两家在美上市中国公司中都持有不少股权， 据《金融时报》(Financial Times)报道，这两家公司被停牌的原因是涉嫌欺诈。凯雷持有艾瑞泰克(China Agritech)股份，公开资料显示这些股份是凯雷两家关联实体通过2009年定向增发购入的。当时1,000万美金的投资对艾瑞泰克意义非凡，该公司公布的2009年营业收入仅7,600万美元。但对于当时资产规模逾900亿美元的凯雷而言，这很难说是一项重大投资。对于凯雷的被卷入有种种推测，包括担任艾瑞泰克董事的凯雷年轻副总裁所扮演的角色。
另外，还有一份报告广泛流传于各类非正式的金融电子出版物。由一家名为Lucas McGee Research的机构发布的该份无出处报告附有粗体声明“本报告的作者及对本报告有贡献者均持有艾瑞泰克空头仓位，如果该股股价下跌，必会获得丰厚回报。”报告声称，看不到艾瑞泰克的化肥厂有卡车进出，虽然公司据称每年生产有50,000吨有机肥。作者经过粗略分析(1卡车= 20吨；2500卡车= 50,000吨)断定日均进出这些工厂的卡车数量应为10辆，而非他们报告看到的零。
由于没有基础市场报价，与这些股票相关的期权也无法交易。期权持有人只能等到到期，然后尽可能猜测究竟是执行，还是不执行手中的期权。据《华尔街日报》(Wall Street Journal)报道，“很多此类股票的融券费率都已一飞冲天，愿意借出股票的对冲基金等持有人从中获利了。”
华尔街各大公司常常大规模参与无货卖空(naked short selling)，但由于各家公司阐述不同，我们无法对此进行衡量。这种无货卖空不仅是合法的，而且还是金融市场最大的利润来源之一。清算公司、机构经纪商、对冲基金和其他持有大型多元化投资组合的公司都为卖空者提供融券。很多公司的融券业务是基于所谓的“易借”名单——易借名单上的股票均允许在一个交易日内卖空，且无需对每笔交易进行确认。
Is China exacting revenge? As holders of around a trillion dollars of our debt, right now they don't have too much to thank America for.
The last couple of weeks have seen some inconvenient stories about Chinese stocks under scrutiny by U.S. regulators. Considering how poor a job the U.S. regulators do of policing our own markets, it makes sense that the SEC would turn its attention elsewhere.
The Carlyle group has substantial stakes in two U.S.-traded Chinese companies, both of whose stocks were halted because of allegations of fraud, according to the Financial Times. Carlyle owns a stake in China Agritech (CAGC), a stock it acquired through a 2009 private placement made through two Carlyle-affiliated entities, according to public records. The $10 million acquisition represented a meaningful infusion for CAGC, which reported $76 million in top-line revenues in 2009. For Carlyle, with over $90 billion in assets, it is hardly a major investment. Speculation about Carlyle's involvement included questions about the role of a young Carlyle VP out of their Shanghai office who has a seat on CAGC's board.
There was also a report that made the rounds of the world of financial electronic Samizdat. Issued by an operation called Lucas McGee Research, the unattributed piece carried a boldface (in both senses of the word) statement that "writers and contributors to this report have short positions in CAGC and therefore stand to realize significant gains in the event that the price of the stock declines." The report alleges that no trucks were seen going in or out of CAGC's fertilizer factories, even though the company supposedly produces 50,000 tonnes of organic fertilizer annually. The quick and dirty analysis (one truckload = 20 tonnes; 2500 truckloads = 50,000 tonnes) led the report's authors to surmise they should see an average of 10 trucks passing in and out of the factories every day, instead of the zero they report having seen.
So far nothing has been proven, but the SEC is asking questions about these companies' financial reporting and imposing trading halts until they get clear answers. CAGC has been held for trading for two months. So far, there are no clear allegations of fraudulent dealings. We hasten to point out that nothing we have seen accuses Carlyle of wrongdoing, nor do we intend to imply any improper action by them. Anyone is capable of making a mistake, but when you're the Carlyle Group, the negative PR consequences can be considerable.
But Carlyle's not alone. A well-regarded Wall Street money management firm was sucked into the fray when 29 year-old Jesse Glickenhaus bought $4 million worth of CAGC for his family-owned asset management firm, according to Bloomberg. His grandfather, well-regarded investor Seth Glickenhaus, said he had "never run into" such a situation. At age 97, "never" is a long time.
The consequences of a trading halt are that no one can get their money out of a position. Owners cannot liquidate their shares, and shorts can't cover. This is something of a bonanza for the clearing firms, which get to collect interest on the credit balances, and charge interest on the debits associated with the frozen investor positions.
Options traded on these shares also cannot trade – there is no underlying market to quote them against. Option holders must wait for expiration, then make a best guess whether to exercise their options, or allow them to expire. According to the Wall Street Journal, "borrowing rates for many of the stocks have skyrocketed, a boon for hedge funds and other owners that are willing to lend shares out."
When the illegal shorting business came to a particularly ugly head, back in 1995 , regulators sought the logical solution: take what is illegal, and make it legal. Short selling rules were stepped up, and more procedures were put in place to ensure that a short seller would be able to deliver stock on settlement date. What it really ensured was that clearing firms should increase their investment, as the stock loan business continues to be a major profit center for clearing firms and prime brokers, as well as hedge funds and other large firms that hold large and diversified stock portfolios.
Major Wall Street firms routinely engage in naked short selling on a massive scale, though we cannot measure it, because of the way they account for it. This naked shorting is not only legal, it constitutes one of the biggest profit centers in the financial markets. Clearing firms, prime brokers, hedge funds, and other substantial holders of large diversified portfolios loan securities for short sellers. Many firms make a business of loaning against what is known as an "easy to borrow" list – a blanket approval for short sales for a single trading day. Stocks on the easy to borrow list do not have to be located individually on a trade-by-trade basis.
Some firms track the positions on their lists during the course of the day and send notification to brokers when the quantities available for borrowing get low. But some firms don't, meaning that if a stocks gets talked down, and short sellers start flooding into the name, by the end of a single day it is possible that more stock has been sold in the market than exists in the hands of the clearing firms for delivery. Naked shorting? By definition, yes. Illegal? Lobbyists are undoubtedly browbeating the SEC even as you read this.
The Chinese are smart. They appear to have taken the most important page out of Wall Street's book: create a good story, and people will buy it without looking too closely. CAGC has gotten its money, all based on a story. Jesse Glickenhaus says he focused on the fundamentals, and it is implied that one important factor in his decision was the Carlyle stake.
Any risk manager will tell you to get to know the market into which you are about to plunge. Keynes' dictum certainly holds true for Chinese reverse-merger companies with opaque financials: the market can remain irrational longer than your cash can hold out.
It remains to be seen whether CAGC is a real company. The SEC trading ban may clarify things, because sooner or later the shorts will want their money. And in our experience, the shorts are the ones in control, very much like the mysterious and oceanic sway of the market itself. We might suggest a corollary to Keynes' Irrationality Principle: the Shorts can remain short longer than you can continue holding a long position at such a depressed price.