GRANT WILLIAMS: 12 months ago I traveled to a chicken farm in Sonoma County, California to talk with legendary short seller, Marc Cohodes, about the pressures involved in building a career around his chosen discipline. During that conversation, mark highlighted one company which he called the biggest fraud he'd ever seen.
MARC COHODES: I sort of view it like as a cattle drive.
GRANT WILLIAMS: Right.
MARC COHODES: You know, I'm going to get the MiMedX cows from Omaha to Fort Worth. I'm going to get them there. But I may get a couple arrows in my ass on the cattle drive. Right? I just have to make sure I don't get them in my back.
GRANT WILLIAMS: Right.
MARC COHODES: Right. I mean, I've gotten many arrows in my ass. I just don't want them in my back. So that's just something you always have to watch for. But, man, I love the cattle drive. I mean, there's nothing better than a good old cattle drive to-- you feel like you're getting the job done.
GRANT WILLIAMS: Yeah, no kidding.
MARC COHODES: And the thing that's just like a absolute pisser is at the end of the day, when this MiMedX is 1, 2, or 3, everyone's going to say how easy it was. Or how obvious it was. Or yeah, that was so simple. You know.
GRANT WILLIAMS: Well let's talk about MiMedX because this is something we've mentioned it a lot already.
MARC COHODES: Yeah.
GRANT WILLIAMS: Let's tell that story. Let's go back to the beginning, how it came on your radar, and just walk us through the story. Because what I-- I followed your Twitter feed, I follow the presentation. It's just a fascinating story.
MARC COHODES: The beauty and MiMedX is I have certain tells. Right? I always say on Twitter that my wig indicator-- literally CEOs who wear wigs-- I think, I think I'm 13 out of 14. And this guy, Pete Petit, he sued Capitol Forum for writing research. Caught my attention. He sued anonymous bloggers to get their name. Caught my attention. But then on his website, he mentions me and my former partner David Rocker.
He says I'm a member of a Cali Cartel, tax evader-- believe me I'm not a tax evader-- money launderer-- I'm not one of those-- all this stuff. And Carson brought it to my attention. And my lawyer sent him a letter to take it down or we'll sue you. And when they took it down and sent a letter, right, saying they took it down, I put it on my Twitter. And Pete Petit has bullied so many women, former employees, customers, the second I put it out on Twitter my direct message--
GRANT WILLIAMS: Him backing down.
MARC COHODES: Him backing down to me. It was almost like a symbol that Mugabe has been overthrown in Zimbabwe. People got into the streets and celebrated. And that was, I think, the sign that there was a big change.
GRANT WILLIAMS: But why do you think he went after you in the first place? Why with the Cali Cartel--
MARC COHODES: He was-- he was stupid. And he bought off on the rhetoric that I'm this all powerful guy who controls all these skeptics and actually believed in all this pack bullshit rhetoric that's out there.
GRANT WILLIAMS: If he'd seen you in the pink crocs, then maybe he wouldn't have-- wouldn't have bought into that.
MARC COHODES: If he would have just called me up and said, what's going on, that would have been different. But I always say there's no greater motivator than disrespect. And this guy showed me the ultimate disrespect by defaming me and accusing me of a bunch of shit. I figure if you're doing something like this, you have a ton of stuff to hide.
And the stuff that has come Luke's and my way. I've never seen the amount of evidence of criminal activity, kickbacks, Medicaid, VA, channel stuffing, revenue recognition, bullshit in my years. So when people asked me on Twitter what I think of MiMedX, at first I said it's in my top 20 all time. Then I said it's in my top 10 all time. Now it's in my top five.
I think their sales are overstated by 70%. I think it's a criminal operation. I think Pete's the mastermind behind it. I think people are going to go to jail, probably him and maybe their general counsel. And they all hassle me and follow me on Twitter. Through anonymous things and threaten me and this, that, and the other. And it's just wonderful.
GRANT WILLIAMS: So how do you go about-- the battle lines are drawn. They come after you, you push back, now you're starting to get people to come to you and say you don't know the half of it. Here's what's going on. How do you, then, build that into something tangible that you can put a case forward?
MARC COHODES: Well just this past weekend, someone in Georgia-- a company-- was doing business with MiMedX. And they have proof of revenue recognition fraud at MiMedX. And there is some lawsuit. Most people can search under MiMedX, or the plaintiff, or the defendant and find things. But in this weird state court you need a docket number.
So this guy reached out to me and he said you should look up this verse MiMedX. And I look it up, and a friend who has LexisNexis looks it up, and someone else looks it up. No-- we can't find shit. Like this on a Saturday, 10:00, Pacific Time. So I go back and I say I need a case number, docket number. Gives me the docket number and we get all this shit.
And I spent my Saturday reading his deposition, reading the complaint, reading the exhibits. And I say fuck. This stuff is just dynamite. And it's proof of revenue recognition fraud. It's proof. So I take it, distill it, rewrite it, highlight it, key word it. We put some of it out on the website, sent part of it to the government. Government didn't know about it. Exhibits, people didn't know about it. And you start weaving this and I say to myself, fuck if they're doing it with this guy. Who else are they doing it with?
And it builds, or it helps build, the mosaic that MiMedX which, even though they have 90% gross margins, they don't really make much money because it's an SGNA fraud. They're kicking back to the doctors through SGNA. And they're playing games, giving doctors stock, to create a pod, to create distribute-- you know, just all these illegal activities.
GRANT WILLIAMS: But none of these are new. These have been going on forever.
MARC COHODES: Exactly, but as I said, there's only really six frauds. And it's like primary colors. Again, I wasn't too good in school. I vaguely remember the primary color thing, but MiMedX is a shade of red. Right? I don't know if it's crimson, or I don't know if it's sunset red. I don't know exactly what it is. But it's get your ass thrown in jail red. I'm playing for keeps here.
This is not shorting a stock at 13 and covering it nine and an eighth, making four points and saying god aren't I smart. No, no, no, no, no, no, no. No. This is for the whole enchilada because I think you're running a fraud. And my lot in life is exposing people like you and this is what I will do. And the deeper you go, and the more you lie and put out these bogus press releases, the more I'll dig in. And that's what he doesn't understand, and that's what people don't understand about me.
Because, at the end of the day, I'll save the system money, I'll save the VA money, I'll save Medicare money, I'll save his customers money. Crooked docs may go to jail like they did with Insys. I think they're being investigated by the DOJ, SEC, VA, HHS, and probably the FDA. That's speculation on my part, right? The company has yet to put out an 8-K saying who they're being investigated by. They dance around the thing.
I don't know if they're going to get raided tomorrow, a week from tomorrow, a month from tomorrow, or a year from tomorrow. But I play until not only the whistle blows, I hear to the echo of the whistle. And I'll keep lobbing stuff over to the government, I'll keep giving stuff to journalists, I'll keep the website updated, I'll keep tweeting about it till this thing blows. And what they don't understand is I won't stop.
GRANT WILLIAMS: A year on, I'm returning to Alder Lane Farm to hear the full story of Marc's battle with MiMedX, and get a look behind the headlines at the pressure and pain that come with taking on a powerful company. And to hopefully demonstrate the important role that short sellers play in financial markets. Hello, my friend.
MARC COHODES: How's it going, Grant?
GRANT WILLIAMS: Good. Been up to much lately?
MARC COHODES: Been quiet.
GRANT WILLIAMS: You know, it's hard to believe it was a year ago, a little over a year ago, that you and I walked around Alder Lane Farm talking about the life of a short seller. And during that conversation you brought up the MiMedX story, which at that point in time was kind of new, right? You'd been looking at it a couple of months, I guess. Or a few months, and you made a big bold call about that thing.
Which a lot of people aren't used to seeing people make those kind of calls in public, and I'm here today so we can find out what happened since. Because we've all been following in the press and stuff, but I know from my conversations with you, it's a much bigger, much deeper story.
MARC COHODES: It really is, but I was really looking forward to guys coming out here for a long time. And I'm looking forward to the prison party, but there's something I need to give you. Means a lot to me. Because you were there when this started. All right? Always speak truth to power. This shows that this is not staged, right?
GRANT WILLIAMS: There's nothing in your life that's staged. That much I've learned about you.
MARC COHODES: Nothing in my life is staged. So, Grant, this is from me to you. There's two of them. One's on my car, and one's in your hands.
GRANT WILLIAMS: Thank you.
MARC COHODES: Please, keep that in pride.
GRANT WILLIAMS: This will never be on EBay. That much I can promise you.
MARC COHODES: There--
GRANT WILLIAMS: That's awesome.
MARC COHODES: --there are only two of those. And it means a lot, me giving that to you. I've always wanted to give it to you from when this piece of shit hit the wall. Aurora gave me those plates for my birthday. Little did I know what all was going to happen. And also because MiMedX is an Atlanta-based thing, I want to give you an Ed Roland and friends special holiday shirt.
GRANT WILLIAMS: I'm making out like a bandit here. This is awesome.
MARC COHODES: You are.
GRANT WILLIAMS: Thank you very much. Thank you very much. I'm going to put these here, for now, because we got a lot of things to talk about.
MARC COHODES: We sure do.
GRANT WILLIAMS: Thank you so much.
MARC COHODES: We sure do, but I just I wanted to give you that.
GRANT WILLIAMS: Thank you. I really appreciate it. This-- this is going to get-- take pride a place, believe me. All right, so let's go back to November 2017, was when-- was when you and I talked about this first. And at the time, as I said, you made some bold calls.
And we went away, and we edited the interview, we put it up. And I came to talk to you about short selling, because it's something that I've always been fascinated by. And it's something that there is just an unbelievable misperception about amongst the general public, who have never done it before.
Because guys like you are painted as evil short sellers, and we had this-- all this stuff with the cabal. The truth is so different to that. And that's what I want to get into today. Just to show people how much work you have to do to do what you've done with this story. What you've had to go through through this last year. And I'm hoping we can persuade Aurora to come and sit with us for a little part of this.
Because this is not about one guy on the phone throwing mud at people. This is about a family going through hell and trying to expose a fraud, which is ripping off, not just investors, but veterans, and the government, and health insurance agencies. I mean this was a gigantic fraud.
MARC COHODES: Yeah. I mean some stuff we'll share later, and talk about. I call it a 12 step fraud that I and others exposed. But the crazy part about this is I'm just a guy. I don't have a firm. I don't manage outside money. I manage my money, I manage my son's money, I'd manage my wife's money but she's so jittery. I wouldn't be able to sleep at night.
And you need a clear mind to be able to do something as sane as this. But, I think at the time, I told you I thought MiMedX was the biggest pound for pound fraud I'd ever seen.
GRANT WILLIAMS: You did.
MARC COHODES: And it's a bigger fraud now, I think, by a factor of five than I thought back then. And the abuse, the threats, the intimidation, that I and Aurora and Max have been part of this past year has been absolutely incredible. People don't know about that. I think they'll figure it out by the time we're done today. But my son Max always says it's not what they call you, it's what you answer to.
And it's really true. If you do not have a thick skin, an inordinate amount of confidence in yourself, and your ability to analyze and fight through adversity, you have zero chance at this. You have zero chance. And I'm not a ballplayer, or a football player, this, that, and the other. But I think I know what people like Reggie Jackson were going through when he'd step up to the plate. He'd have a bunch of people cheering for him, and he'd have a whole lot of people booing him.
And I always say there is no greater motivator than disrespect. And these MiMedX guys brought out my game and then some. They literally brought out everything I had, and then some. Stuff-- stuff that I didn't even know I was theoretically capable of, especially at age 58. Because I always say that shorts age in dog years.
So I think your dog years, for every one, it's seven in people. So that would make me, essentially, 420 years old. But, but this was the greatest thing I've ever done. And I think I've done some decent stuff over time.
GRANT WILLIAMS: Well let's go back to a year ago. And we won't rehash how you got dragged into this thing. Because you did get dragged kicking and screaming into this whole situation, right, by MiMedX themselves. A decision that, I'm sure, they are regretting seriously at this point.
Anyone that wants to catch up on that part of the story can go back and watch our original interview, which they should do anyway. But just after we left here, having filmed that interview, things started getting crazy.
AURORA COHODES: Marc was in the house with Max. And two men approached, and they said they were with the FBI. And my first thought was that someone was threatening Marc's life. And I said, OK.
MARC COHODES: You're so-- you're so adorable. You missed, though, the whole run up to that. It was a Friday, midday, and my friend-- who's since passed away, Billy Buckingham-- he was fighting cancer for four years, at that time, he came up to have lunch with me. Which meant a lot to me. Meant a lot to him. And we were talking about MiMedX.
Max was at the table drinking tea and Billy I were talking about MiMedX. Now go ahead.
AURORA COHODES: And they-- I heard the car and I was walking out of the house. And I approached them, and they said they were looking for Marc. They said they were the FBI and I, again as I said, I thought that perhaps there was a threat, and I said do you have some ID? And honestly I asked because their suits were so bad that I was concerned. And one of them--
MARC COHODES: They looked Joseph Banks centric.
AURORA COHODES: --one of them showed me a badge, but didn't show me anything else. And I said stay here. I'll go get Marc. And they followed me, which irritated me. And I said stay here. I don't want his son upset.
MARC COHODES: Yeah.
AURORA COHODES: So I made them stay. And then we invited them in the house because, again, at this point we were thinking someone was threatening Marc because that's typical.
MARC COHODES: Well you knock on the door and you say there's two guys here to see you. I said, well, tell them I'm busy. I'm here with Billy. And Aurora goes, they're with the FBI. And I'm thinking oh, goody, goody. They've finally taken my MiMedX information I've sent in seriously. I'll go talk to them.
AURORA COHODES: So they came in and sat down at the table. And Marc sat down with them, and I stood back a little bit. And a young man who was doing some work with Marc was here, also, sort of standing off in the background with me. And right away, immediately, they started with the you need to shut up. I mean, not exactly those words. I'll let Marc go into that more specifically. But enough that I was listening very carefully to what they were saying. And then--
MARC COHODES: They said you need to quit tweeting about Mr. Petit. And I'm thinking what the hel--
GRANT WILLIAMS: At this point suddenly you're--
MARC COHODES: I'm like thinking what the hell? First of all, I said, do I need to call my lawyer? And they said no, no. You shouldn't call your lawyer. They said you need to stop tweeting about Mr. Petit. And Aurora's sort of standing in the foreground and--
AURORA COHODES: Actually what I started doing when this was the line of conversation, I started taking pictures. I walked behind one of them and I flipped open his wallet. His ID was on the table, and I flipped it open and I'm thinking this can't be a real FBI agent. He wouldn't let me touch his things. And at this point, I think Marc and I both were thinking they were fake FBI.
MARC COHODES: Yeah.
AURORA COHODES: And so--
MARC COHODES: It couldn't have-- we thought it couldn't have been real. So I go to him-- and the guy with the dark hair is sort of belligerent-- and I said do you have a warrant? He says no. I said am I the subject of an investigation? He says no. I said then you need to leave. And then he says no. And then I told Aurora to call the Sheriff to get him to leave.
And Aurora was already dialing the Sheriff to get him to leave. And I tried calling my lawyer, Shapiro-- who spends most of his time making pottery-- and he didn't pick me up. And then I called him again. And he didn't pick me up. And the FBI guys berate me about do you understand what I'm saying? You need to quit tweeting about Mr. Petit.
Like Mr. Petit-- like he worked for this guy. Like he worked for that little weasel, Parker. And then I just said there's nothing to my tweets. And he said if you