A year before Carson Block launched Muddy Waters Capital, his hedge fund firm, he started trying to line up a prime broker — an investment bank that could lend him stocks so he could then sell them short. But the task was proving arduous. The problem, he believes: Block had made his name calling out China frauds, and Wall Street loved China. After several bulge-bracket banks turned him down, Block decided to try his luck with Jefferies Financial Group, a scrappy up-and-comer known for its trading skill. Muddy Waters, then only a research firm, was based in San Francisco, so he arranged an interview with Jefferies CEO Rich Handler on his next visit to New York City.