Professor James Fanto commented to Bloomberg on the recent "pre-marketing" of Sino-Forest Corp. by Muddy Waters Research to various hedge funds. Although there is speculation that this move was fraudulent, Professor Fanto explains that there is nothing illegal in offering reporting to hedge funds before reporting to the public. "Muddy Waters can profit from this information itself, or allow others to profit from their insights as well," he said. "The only problems emerge when research is in fact based on insider tips. But that doesn't seem to be the case here."
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