Citigroup Comments On Lennar (LEN) Following Ponzi Scheme Allegation, Says "Likely Less Than Credible"
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Citigroup is out with comments on Lennar (NYSE: LEN) following an allegation from Fraud Discovery Institute that the company is operating a ponzi scheme through its numerous joint ventures.
Citi notes that LEN's joint ventures have been an overhang on the stock for some time, but mainly related to the question of much of the joint ventures' debt could hypothetically be recourse to LEN.
The Citi analyst said, "Our gut reaction is that the allegations are likely less than credible. The document itself strikes us as somewhat less than professional in its tone and content. Also, while in our past discussions with various land developers around the country those developers have described LEN's management as tough and shrewd negotiators, we have never once heard any allegations that LEN's management was dishonest in its business dealings." The firm acknowledges that a "gut reaction" is not an edge and they said the consequences to being wrong could be severe.
Citi admits they have never heard of Fraud Discovery Institute and is not familiar with its past work.
Fraud Discovery Institute of course is run by former fraudster-made good Barry Minkow. He has targeted USANA Health Sciences Inc. (Nasdaq: USNA) and Herbalife Ltd. (NYSE: HLF), and Broadcom (Nasdaq: BRCM) among others.
Citi notes that LEN's joint ventures have been an overhang on the stock for some time, but mainly related to the question of much of the joint ventures' debt could hypothetically be recourse to LEN.
The Citi analyst said, "Our gut reaction is that the allegations are likely less than credible. The document itself strikes us as somewhat less than professional in its tone and content. Also, while in our past discussions with various land developers around the country those developers have described LEN's management as tough and shrewd negotiators, we have never once heard any allegations that LEN's management was dishonest in its business dealings." The firm acknowledges that a "gut reaction" is not an edge and they said the consequences to being wrong could be severe.
Citi admits they have never heard of Fraud Discovery Institute and is not familiar with its past work.
Fraud Discovery Institute of course is run by former fraudster-made good Barry Minkow. He has targeted USANA Health Sciences Inc. (Nasdaq: USNA) and Herbalife Ltd. (NYSE: HLF), and Broadcom (Nasdaq: BRCM) among others.
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