The newsworthy thing about this was that large trading institutions were fooled, not just retail investors. Paulson & Co., a New York based hedge fund and one of the largest in the US, was the largest shareholder with 34.7 million shares, which on the morning of the announcements by Muddy Waters was valued at $624 million. At the close of trading on the same day, the stake was only worth $501 million and the shares later fell to only $6 each. Ouch.
Some of the highlights from Muddy Water’s report made for fairly grim reading:
- Sino-forest was one of the rare frauds committed by an established institution. In Sino-forest’s case, its early start as an RTO [Recovery Time Objective] fraud…
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