A Wall Street Scion's Expensive Education

When Jesse Glickenhaus joined his family's New York asset-management company in October, he wanted to bring its stockpicking into the era of global warming. That's what led him to make a $4 million investment in China Agritech (CAGC), a Beijing-based producer of organic fertilizer listed on the Nasdaq Stock Market (NDAQ) and 22 percent-owned by Carlyle Group. It was, Glickenhaus says, a way to profit from the need to feed China in an environmentally responsible way.

Or so it seemed. The same week in November that Glickenhaus & Co., which has $1.3 billion under management, bought most of its shares—about a 2 percent stake in the company—China Agritech replaced its auditor. Three months later, investors who had bet against China Agritech's stock attacked the firm as a scam with no real operations. Shares tumbled to $6.88 on Mar. 14, when trading was halted for failure to file financial data, from $15.87 on Nov. 8, giving Glickenhaus & Co. a $1.8 million paper loss based on what it says was an average purchase price of $12.37. "It's not nothing, but it's not a big deal for us financially," says Glickenhaus, dressed in frayed khakis and a rumpled shirt, in the company's midtown Manhattan office. "The real reason we're fighting is because we believe someone blatantly lied to short the stock."