This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Bigtime Investors Lose Big on China

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Longtop Financial (LFT) came public in the U.S. through the front door, using an IPO as opposed to a murky backdoor reverse merger, in which a private entity is folded into a shell company that already has a stock registration. As such, Longtop ought to have undergone a more rigorous screening process -- by regulators as well as investors.

None of this was able to prevent the eruption of yet another accounting scandal four years after the IPO, underwritten by Goldman Sachs (see below) and Deutsche Bank (DB) raised about $180 million for Longtop. In an astonishing series of disclosures in May, Longtop was forced to reveal that its auditor -- once again, the Chinese affiliate of Deloitte -- claimed to have found evidence of bank-document forgery and other falsified financial data. The stock was halted on May 17 and remains so. Longtop said its cooperating with an SEC probe.

Longtop's bulge-bracket backing drew in a group of brand-name investors and mammoth investment funds as institutional holders, including Fidelity and several so-called "Tiger Cubs," former apprentices of the hedge-fund legend Julian Robertson: Lee Ainsle's Maverick Capital and Charles "Chase" Coleman's Tiger Global Management. As of March 31, the two funds held 10% and 4.6% of Longtop, respectively.

It's Tiger Global, however, that has the honor of owning large blocks of two halted Chinese stocks at the moment: Longtop and Duoyuan Global (DGW), the sister company of Duoyuan Printing (DYNP), which was summarily delisted by the New York Stock Exchange earlier this year after an auditor resigned and the SEC began investing potential illicit activity.

A spokeswoman at Tiger Global declined to comment.

6 of 7

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs