Shares of Solutions 30, a Muddy Waters Short, Tank After Auditor Raises Concerns

The suspense surrounding a two-week halt in the trading of one of Muddy Waters’ longest held, most obscure short targets is over — and the stock is tanking.

两周前，Solutions 30，少年卖方指责有关组织犯罪的欧洲IT服务公司，要求巴黎证券交易所暂停其股份交易 - 然后交易约10欧元。

到上周结束时，该公司表示将重新打开周一交易，同时承认其审计师无法为其年度报告填补审计。当交易日星期一在巴黎结束时，解决方案30跌幅超过70％，截至3欧元的日期。

Carson Block, Muddy Waters’ CEO, told亚博赞助欧冠在提出了关于解决方案30的新报告之后，他一直在加州家中观看股票价格过夜，在公司30 - 他的第八次宣传上。

(That number includes a recent Zer0esTV video called “The Cable Guy With Mafia Ties,” focusing on Muddy Waters’ claims that the company has byzantine relationships with sketchy characters. “I’ve looked at hundreds of public companies and I’ve never seen this many coincidences involving money laundering and convicts,” Block said on the video.)

在星期一的事件转向时，块被录取为“流化”。“在上午3点。我决定观看股票的地方，”他说，承认他现在累了，“但这很累。”

As Block explained in the latest report, which hit around 7 a.m. Paris time, Muddy Waters’ short of Solutions 30 “has been a long and strange journey.” The hedge fund first shorted the stock on May 17, 2019, when Solutions 30 was trading around 12 euros per share, with a market cap of more than 1 billion euros.

该报告在幽默的注意事项开始：“我们为此方案规范了这个问题：想象一下，如果你认为你的伴侣正在欺骗你，”它开始了。

“你在一瞬间到达你的房子，你相信作弊正在进行，并在车道上看到你的伴侣的车，以及另一个不知名的汽车。您在您的共用卧室内进入并停止。门关闭了，你听到了来自内部的声音，表明双方都放在金牌表演中。但门被锁定 - 你无法打开它。你现在是“ - 解决方案30的审计员，恩斯特和年轻人。

恩斯特＆年轻人没有签字

On Friday, Solutions 30 acknowledged what appeared to be the holdup in the lengthy trading suspension: Ernst & Young had not signed off on the firm’s 2020 financials for its annual report.经过Sunday, Ernst & Young put out its own statement, saying that the IT company’s financial statements could contain “undetected misstatements [that] may be both material and pervasive.” The accountant added that its attempts to investigate further were blocked by Solutions 30.

“我们无法获得有足够的和适当的证据支持本质的某些交易的性质，实质，价值和遵守法律和法规，并确定这些交易是否与相关方就与管理人员一起作出了这些交易，“Ernst＆Young在一份新闻稿中表示，摘录在其最新的态度中含有泥泞的水域。

“这一结果推出了我们的信心[解决方案30]可能参与洗钱，是欺诈，”泥泞的水域在其新报告中陈述。

When it first shorted the company two years ago, Muddy Waters did not issue a report on Solutions 30. But asIIrecently报道，股票仍然下降了20％后，在对冲基金披露短岗位后，正如欧洲证券法规所必需的那样。

块说他当时没有通过他的短争论公开，因为泥泞的水域仍然纠结在法国证券监管机构的调查中，这是法国零售商的缺少Groupe Casino。解决方案30在巴黎的交易，尽管它近年来将其公司总部从法国移到卢森堡。

黑手党联系和欺诈指责

There was little media coverage of Solutions 30 until October of 2019, when the金融时报picked up the story. Then the news went silent until last December. At that time, just before Muddy Waters was set to go forward with a report, according to Block, an anonymous report detailing some of the same issues was released.

The stock — which had run up as high as 19.75 euros during the pandemic — started falling again.

Block then put out his reports in the form of letters to Solutions 30, focusing in part on the company’s links to an Italian accountant named Angelo Zito who, according to public reports Muddy Waters had uncovered, spent time in prison in 2000 over his links to the Sicilian mafia. Solutions 30 said that it had ceased all ties with Zito once they found out about his past. But Zito, in a TV interview, said they were aware of it all along. Then Solutions 30 hired one of Zito’s former employees, a man named Fabien Leger.

所以涉嫌欺诈的地方？根据块，“它实际上与我们看到的许多重要的欺诈方式有所不同。这将是1000削减的死亡。“

The beauty of it, he explained, is “if you are carrying out fraud with a lot of low dollar transactions, it’s easy to avoid scrutiny.”

Block pointed to small transactions that Muddy Waters examined in its letters to Solutions 30 as evidence for “why we think there could be fraud in reporting about the transactions.”

这些交易包括许多收购，该批判机构在其最近的增长刺激中与壳牌公司进行了解决方案30。在一个情况下，被引用的泥泞的水域，解决方案30似乎对公司支付的比其资产主要支付 - 主要是现金 - 是值得的。“企业没有实质内容，”块说。后来，他解释说，该业务被出售给了一个解决方案30的独立董事之一。

“当他们在资产中获得的钱少收购它，看起来像洗钱交易，”块解释说。

Solutions 30 denied the accusations, but after Muddy Waters’ public letters, it eventually said it would authorize an independent investigation to look into the claims.

On April 1, Solutions 30 released the results of that investigation, with board chairman Alexander Sator stating, “Solutions 30 and its leaders have been the subject of very serious accusations that the independent audit has fully rejected.”

但块已经指出，评论不是审计，而且更有趣的是它没有找到的 - 来自首席执行官的六个月的电子邮件似乎遗失。

Now Solutions 30 says it is looking for a new auditor and also may sell the company, possibly ending up with a delisting.

Meanwhile, a Romanian business partner of Solutions 30 last month sued Muddy Waters in a California federal court over the short seller’s allegations of the company’s links to criminals and suspected money laundering. Muddy Waters has noted that some bank accounts of entities controlled by the man who sued the hedge fund, Federico Salmoiraghi, appear to have been closed due to money laundering concerns.