“Despite comparing himself to the Batman of Wall Street, Daniel Yu has a sordid criminal history and is a convicted felon,” states the lawsuit filed by the pharmaceutical company Grifols in New York against the founder of Gotham City Research, the vulture fund that issued a report accusing it of falsifying its accounts and caused its stock market crash that reduced the value of the group by more than 3,000 million euros. According to the lawsuit, Yu has served prison time for theft in Colorado, United States, and has previously been charged with identity theft and other financial crimes.
The lawyers from the American law firm Proskauer, who have prepared the lawsuit to which La Vanguardia has had access, have delved into Daniel Yu’s past and collected the adventures of the officer who supervised his parole in the state of Colorado, whom he then young analyst tried to deceive.
According to the brief, filed in the Southern District Court of New York, “in 2007, while Yu was working as a securities analyst for Dividend Capital, he stole several cell phones, iPods, computers and company checks” as well as passports, and copied licenses. driver’s license and other forms of identification for your office colleagues.
Colorado police searched his home and also found copies of similar documents from students at MIT, where he had been a student, with photocopies of credit cards, bank statements and even a death certificate.
Yu pleaded guilty to two theft crimes: for one of them he was sentenced to restitution to Dividend Capital, his former company, $134,152.51, the value of the stolen objects, and to one year of probation, while the court suspended for four years the trial for the most serious crime of robbery.
The following year the State of Colorado revoked Yu’s parole and ordered his arrest for leaving the state and failing to appear for probation supervision appointments. Thus, in October 2008, Yu was retried and sentenced to 90 days in prison.
According to the lawsuit, “prison time did little to deter Yu from engaging in criminal activity.” The young executive of Asian origin went to New York (despite the fact that the sentence confined him to Colorado) and “deceived and lied to his probation officer about his employment situation.”
Thus, the brief states, in 2011 he gave contradictory information about the company he worked for to the officer supervising his probation, and he finally discovered that “the letters, payment receipts and the copy of the check provided by Yu” to prove His employment situation and his financial capacity to pay the compensation to which he had been sentenced were false.
On October 19, 2011, Yu was arrested again and charged with attempting to influence a public servant and forgery. The trial ended with a plea agreement: Daniel Yu pleaded guilty to one count of attempting to influence a public servant and was resentenced to three months in prison, which he served in the Denver County Jail.
With the sentence served, Yu moved to New York, founded Gotham City Research and specialized in investigating the accounting of listed companies and exposing irregularities to cause the stock market to fall. Gotham makes money by taking “short” positions on these companies, that is, it sells shares without owning them, borrowing them, and buys them back later when the crash that its reports have caused occurs.
Currently, according to investigations carried out by Proskauer’s lawyers, “Yu uses several other aliases and frequently changes addresses,” although within the state of New York.
“Gotham was formed for the purpose of committing financial fraud,” the lawsuit bluntly states, with the goal of being “a vehicle and shield for their criminal enterprise.” According to Grifols lawyers, “Yu and Gotham have previously been sued for their illegal and defamatory practices, but they did not appear in court, failing to comply with their obligations.”
Gotham, in his view, has no existence of its own outside of Yu, its sole employee or officer who “controls the affairs of Gotham, without regard to the separate existence of the corporate entity.” Thus, he assures that “Gotham does not have enough funds and its funds have been mixed with Yu’s personal funds.”
The lawsuit even raises the question that Gotham City Research remains a legal entity, since it has not met corporate legal requirements: the state of Delaware canceled its registration as a company in 2021 due to its failure to appoint a registered agent when the previous one resigned. . Despite this, “Yu continues to operate a business called Gotham City Research LLC,” the lawsuit states.
Gotham’s activity, which the lawsuit describes as “crimes,” however, could enter a new stage since according to Grifols’ lawyers, the United States Department of Justice has recently opened an investigation into Gotham and Yu for possible abusive practices. in the American stock market.
