A 2011 article in the Australian Financial Review describes him as a former J.P. "Claimant 2 has not proffered any reason for his/her failure to submit his/her information to the Commission," the award said. "Claimant 2," who appears to have been Barnes and wasn't given an award, also claimed to have authored the report, but was found by the SEC to have been less proactive. Claimant 1, who got the award, claimed to have published an online report, which it then sent to an SEC enforcement lawyer and to have cooperated with follow-up requests. The SEC's award decision mentions that two self-proclaimed whistleblowers sought a piece of the settlement. It subsequently went private and was relisted on a Chinese exchange. The company denied the allegations in the reports.
Muddy Waters' reports on Focus Media said the advertising company, which was then traded on the Nasdaq, overstated its reach and had a questionable track record of acquisitions and insider dealings.
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But information in public documents and on Muddy Waters' website points to Focus Media, a Chinese company that was targeted by Muddy Waters in a series of reports in late 2011 and agreed to pay the SEC $56 million in September 2015. The lawsuit didn't name the company that was the subject of the report attributed to Block and Barnes. The SEC's announcement of its award to Block - who it referred to as "Claimant 1" - said he was "persistent" in contacting the agency's staff.Įvidence points to Focus Media, a Muddy Waters target "It would really undermine their credibility if it looked like they were getting played." "The SEC has been very receptive to all of this, but is obviously and appropriately cautious about not moving the market," said Michael Ronickher, an attorney at Constantine Cannon who represents whistleblowers. Whistleblower lawyers say the SEC often approaches short-seller whistleblower claims skeptically. But details of Block's payment were revealed in a Monday court filing by a short seller named Kevin Barnes, who claims that he had a research partnership with Block and was frozen out of the award. The details of SEC whistleblower payments are usually kept under wraps, as the agency redacts the names of the whistleblowers it pays. The SEC has awarded more than $1 billion to whistleblowers, most of them anonymous.įamed short-seller Carson Block scored a $14 million windfall earlier this year for sharing one of his reports on corporate misconduct with regulators, a new lawsuit claims.īlock, whose Muddy Waters Research made a name by shorting opaque Chinese companies, won the payment in March as part of the Securities and Exchange Commission's whistleblower program, which cuts checks to tipsters who help expose financial misconduct.Kevin Barnes said he and Block had a research partnership, but Block won't cut him in on the award.Carson Block of Muddy Waters received a $14 million award from the SEC, court papers reveal.