What a view | The documentary Wall Street does not want you to watch, The China Hustle now on Netflix

If ever a documentary could convince you to stash your money under the mattress, The China Hustle is it.

Writer and director Jed Rothstein’s film, a recent addition to Netflix, exposes a globe-straddling economic con Washington continues to ignore. Financial catastrophe, affecting everything from international trade to personal savings accounts, is imminent, or so the narrative goes.

Rothstein and his investigators argue that, while the world was still spluttering through the fallout from the 2008 financial meltdown, “Wall Street had already figured out a new way to package garbage as gold”. This time, the lies on which the “enormous fraud” was founded “were legal [and] this time the crime was based in China”.

While the West was staring in trepidation down the barrel of economic depression, China was hosting the only vibrant market – but foreigners were excluded. That prompted investment banks such as Roth Capital and Rodman & Renshaw to list hundreds of small Chinese firms directly on United States stock exchanges, earning themselves big money. Analysts would then recommend the colossally overvalued stocks as sound investments, with company bosses in China growing rich on the proceeds.

The process by which these companies were introduced to the US market was opaque. No one asked questions until businessman Carson Block began unpicking the web of deceit in 2010, having considered investing in a company called Orient Paper. Doing his own due diligence, and making the effort to travel east, Block found a dilapidated factory containing broken machinery and mounds of rotting cardboard. The business, says Rothstein, was “a total fraud”, adding that this was “the first time anyone had poked a hole in the Chinese miracle”.

The listing of the Chinese companies in the US was achieved by “reverse merger”, whereby the incoming company would occupy the shell of a non-operational firm that existing in name only, thus circumventing auditing requirements. And hey presto! The company was in, no regulatory red flags waved.