NEW YORK, June 21 A press release alleging that
regulators had charged short-selling research firm Muddy Waters
with fraud is a hoax, the Securities and Exchange Commission
said on Tuesday.
Earlier on Tuesday a press release was posted on
Briefingwire.com, which allows the free publication of
releases, saying Muddy Waters was being charged with fraud.
Muddy Waters, which has published research reports critical
of several Chinese companies listed in the United States and
Canada, later released a statement saying the release was a
A spokeswoman for the SEC said the release was a fake, but
would not comment on whether the agency is investigating
further or has informed other authorities.
BriefingWire later removed the release. Questions emailed
to BriefingWire by Reuters were not been answered; the company
does not list a phone number on its website.
BriefingWire's site says people can add and remove press
releases on their own, although Muddy Waters said in its
statement that it specifically asked BriefingWire to take the
U.S.-listed Chinese shares have come under fire as a rash
of accounting scandals have been uncovered by short-selling
research firms. Many of these stocks came to U.S. exchanges
through reverse takeovers, in which a larger company obtains a
stock listing without going through an initial public offering
by combining with an already-listed shell company. Several of
these stocks have since been delisted.
One of the largest targets of Muddy Waters is Sino-Forest
TRE.TO, a Chinese forestry company listed in Canada. Shares
of Sino-Forest have fallen 90 percent since being accused of
accounting fraud by Muddy Waters. Hedge fund manager John
Paulson, at one point the company's largest shareholder,
recently sold his stake at a big loss. [ID:nN1E75J0AK]
The short sellers have come under fire from investors and
the companies themselves.
(Reporting by David Gaffen; Editing by Leslie Adler)