Carson Block Says U.S. Should Be Willing to Drop China Listings

WATCH: Carson Block, co-founder and chief investment officer at Muddy Waters, discusses his concerns over the corporate governance and possible fraudulent accounting practices of some Chinese firms listed on U.S. exchanges.(Source: Bloomberg)

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By Elena Popina

May 20, 2020 at 6:29 PM UTC

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Stock market catastrophes like Luckin Coffee show U.S. regulators and exchanges need to be much more judicious in their embrace of China-based companies, says Carson Block, the famous short seller.

The Chinese coffee chain, once a $12.6 billion company, is being ousted from the Nasdaq after accusations of accounting fraud led the onetime market darling to say its chief operating offers may have fabricated billions of yuan in sales. The stock’s value fell to about $700 million on Wednesday as trading resumed for the first time in more than a month. In an interview with Bloomberg TV’s Erik Schatzker Wednesday, Block warned that among U.S.-listed Chinese companies, “a substantial majority are committing at least some level of fraud” by American investors’ standards.