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Greenberg: Was Research Firm Hoodwinked?
CNBC.com | March 03, 2011 | 11:14 AM EST

When it’s too good to be true, and too easy, maybe it is for a reason.

Wednesday a research firm called Muddy Waters Research, which specializes in Chinese stocks, issued a report that claimed “irrefutable evidence of fraud” at Chinese MediaExpress —a Chinese company that claims to put advertising on inter-city buses in China.

Key proof, according to Muddy Waters: The recording of a phone call between a ChinaMediaExpress sales rep and a Muddy Waters analysts pretending to be a potential customer. Muddy Waters put together a slide show of the call , with English translations.

It’s remarkable stuff, if it’s true. And I stress the word, “if.”

Here’s the chronology, according to Muddy Waters:

On January 11 an analyst from Muddy Waters, claiming to be from a small company, called the company’s headquarters asking to speak to the sales department.

On February 3 Muddy Waters initiated coverage on the company with a “strong sell.” The report included a copy of a sales presentation Muddy Waters—acting as a customer—had received from the company.

Within days the company fired back , refuting the claims of Muddy Waters and another research firm, Citron Research.

Now for why I question if it was hoodwinked:

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