Short-seller Muddy Waters seeks to unmask Google Gmail fraudster

NEW YORK (Reuters) – Muddy Waters, the investment firm run by prominent short-seller Carson Block, on Wednesday asked a New York court to force Google to help it identify someone who impersonated a Wall Street Journal reporter to uncover its strategy toward a French retailer it was betting against.

FILE PHOTO: Carson Block of Muddy Waters Capital LLC., speaks at the Sohn Investment Conference in New York City, U.S. May 4, 2016. REUTERS/Brendan McDermid/File Photo

The unusual petition filed with the state Supreme Court in Manhattan seeks the identity of “John Does 1-5,” who Block said admitted to misusing Gmail accounts to learn his thoughts about the retailer, supermarket operator Casino Guichard-Perrachon SA (CASP.PA), and his whereabouts.

Google, a unit of Mountain View, California-based Alphabet Inc (GOOGL.O), had no immediate comment, because it was reviewing the legal papers.

In a statement, Block said he pursued the matter following “numerous attempts at surveilling me for over a year.”

Block made his mark in the $3 trillion hedge fund industry by challenging accounting practices of Chinese companies such as Sino-Forest Corp, once backed by billionaire John Paulson, and then shorting their stocks, betting the prices would fall.

He began targeting Casino’s accounting practices and use of leverage in December 2015, prompting the operator of Monoprix and Geant stores to accuse him of issuing misleading research for his own benefit. Standard & Poor’s nonetheless downgraded Casino to “junk” status three months later.

According to the petition, “John Does 1-5” from September 2016 to October 2017 frequently sent emails and made phone calls to Muddy Waters falsely claiming to be Journal reporter William Horobin, an investigator at French securities regulator Autorite des Marches Financiers and an employee at a Paris private bank.

Muddy Waters said these communications sought information on its Casino research, Block’s speaking schedule and whether the regulator was investigating the firm.

On Oct. 30, according to the petition, “John Does 1-5” admitted to Block at a meeting at a Manhattan hotel to having lied by assuming Horobin’s identity, believing Muddy Waters would not have communicated with him otherwise.

But when Block asked “John Does 1-5” for his real identity and whether Casino had hired him, “the individual quickly left the hotel,” the petition said.

Muddy Waters said it wants information from Google on whoever controls two Gmail accounts used in the surveillance. It said Horobin has confirmed he does not control the account bearing his name.

Casino and News Corp (NWSA.O), which owns The Wall Street Journal, did not immediately respond to requests for comment. Neither is a target of the petition.

The case is In re: Muddy Waters Capital LLC for an order pursuant to section 3102(c) of the Civil Practice Law and Rules to compel pre-action disclosure from Google Inc, New York State Supreme Court, New York County, No. 159730/2017.

Reporting by Jennifer Ablan and Jonathan Stempel in New York; Additional reporting by Matthias Blamont in Paris; Editing by Jonathan Oatis and Cynthia Osterman

Our Standards:The Thomson Reuters Trust Principles.

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