Dan David was a one-time jewelry executive who didn’t know a word of Mandarin. Yet he helped unmask several frauds among the dozens of U.S.-listed China stocks that have burned investors in the last couple of years and has raised allegations against others. When the Securities and Exchange Commission filed civil-fraud charges in February against the chairman of China’s Puda Coal, its complaint cited a report that the 43-year-old David had put out at GeoInvesting, a financial-information Website focused on small-cap stocks and based in Skippack, Pa. Why weren’t investment bankers and other Wall Street pros able to do what he did? Why didn’t they listen to his warnings? And how are investors now endangered by efforts in China to shut off information sources for researchers like David? He explains below.
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