Yahoo Finance 
A Carson Block short has been frozen by the Chinese government, and the stock hasn't traded at all today
(Reuters/ Rick Wilking)Carson Block mentioned 500.com as a short back in September.
Shares of Chinese sports lottery site 500.com (WBAI) have been halted since Monday morning with news pending.
On Friday, 500.com said it reached an agreement with the Chinese government that essentially suspended the company's business.
"The Company plans to voluntarily and temporarily suspend all of its online lottery sales services starting from April 4, 2015. During this temporary suspension period the Company expects that it will not generate any revenue," the statement said (See full statement below).
500.com is also a target of influential short-seller Carson Block. Shares have fallen 64% since he publicly mentioned the stock at a private conference in New York City back in September.
Block, who runs Muddy Waters Research, gave 500.com as a short idea at the Value Investing Congress. The VIC was closed to press, but an attendee told Business Insider that there were about 2 slides in Block's whole slide deck that mentioned 500.com. The source told us that Block identified some "red flags," but nothing confirmed in terms of fraud.
"He still thinks the company is a short (ie. strong sell) but won't talk about day to day positions," a spokesman for Muddy Waters Research told Business Insider in an email.
Block is famous for targeting Chinese companies he believes are frauds. He's probably best known for his takedown of Sino-Forest that ultimately caused hedge fund billionaire John Paulson to lose millions and eventually sell out of the stock. Sino-Forest, which Block said was overstating its timber holdings, eventually ended up filing for bankruptcy.
Here's a chart of 500.com's stock since September:
(Google Finance )
And here's a copy of the company's press release regarding its online lottery sales:
SHENZHEN, China, April 3, 2015 /PRNewswire/ -- 500.com Limited (WBAI) ("500.com" or the "Company"), a leading online sports lottery service provider in China, announced that today a public announcement, or the Public Announcement, with regard to online lottery sales in China was jointly released by eight competent government authorities, namely, the Ministry of Finance, the Ministry of Public Security, the State Administration for Industry & Commerce, the Ministry of Industry and Information Technology, Ministry of Civil Affairs, People's Bank of China, the General Administration of Sports of China and China Banking Regulatory Commission. The Public Announcement mandates, among other things, that (i) all institutions, online entities, or individuals which provide unauthorized online lottery sales services, either directly or through agents, shall immediately cease such services and all provincial governmental authorities of finance, civil affairs and sports shall investigate and sanction unauthorized online lottery sales in their respective jurisdictions according to relevant laws and regulations; (ii) local government authorities of public security and industry & commerce shall investigate any sales of illegal lottery products within their respective jurisdictions, with necessary assistance from local government authorities of finance, communication, banking regulatory commission, civil affairs and sports and local branches of the People's Bank of China, and report any criminal activities to law enforcement for prosecution; and (iii) lottery issuance authorities that plan to sell lottery products online shall obtain a consent from the Ministry of Civil Affairs or the General Administration of Sports of China in order to submit an application for written approval by the Ministry of Finance, and any entity that provides online lottery sales services must be pre-approved by the Ministry of Finance.
To assist the competent government authorities to implement the Public Announcement, the Company plans to voluntarily and temporarily suspend all of its online lottery sales services starting from April 4, 2015. During this temporary suspension period the Company expects that it will not generate any revenue. The Company will continue to work with China Sports Lottery Administration Center for the development of the pilot program for online sales of sports lottery. The pilot program was mandated by the Notice on the Commencement of the Pilot Program of Online Sales of Sport Lottery issued by the Ministry of Finance in 2012, which approved Shenzhen E-Sun Sky Network Technology Co., Ltd., a consolidated affiliated entity of the Company, to be one of the two entities to provide online lottery sales services on behalf of China Sports Lottery Administration Center. The Company is also in active communication with the competent government authorities and will make announcements with updates on the situation once available.
NOW WATCH: Why billionaires and power players go to Tony Robbins for advice
More From Business Insider
