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Uncovering Carson Block’s “Pandora” Box – DOJ Investigation, Cayman Islands Entities and the Fugitive Trader

DOJ Investigation: Early in 2022 it was reported that Muddy Waters among short sellers being probed by U.S. Justice Dept. The investigation focused on suspected coordinated manipulative trading by short-sellers and hedge funds.

Later it was announced that the FBI served a search warrant to Muddy Waters Carson Block in short selling probe.

Block, one of the founders of Muddy Waters, declined to comment at the time, funny, the guy who wishes to expose other’s wrong doing, keeps silent on his investigations.

It is unknown to the public who are the other founders of Muddy Waters, yet a pair of Israelis accused in the U.S. of being involved in a sprawling international insider trading ring were once close associates of Muddy Waters founder Carson Block, and some sources allege that they might be the co-founders of Muddy Waters.

The Cayman Islands Connection

Carson Block insists on registering his vehicles in Cayman Islands, perhaps to protect the source of funds and his investments.  In its official documents, MW declares that 50% of its assets under management are attributed to non-United States persons, with $ value of over $100M USD.

It is already a known fact that Muddy Waters Investment Funds are domiciliated in the Cayman Island and Delaware. The Board of the Cayman domiciled fund includes a Director – Andrew Hersant – appearing in the “Paradise papers”.

A fact that was less public, is that ALL of MW directors are savvy veterans of Cayman Islands who know all the tricks.

Mr. Paras Malde, Director at MW is proud of being:

  • Member of Cayman Islands Directors Association CIDA
  • Member of the Cayman Islands Institute of Professional Accountants
  • Committee Member of Hedge Funds Care Cayman Charitable Organization
  • Founding Member and former Treasurer of The Blockchain Association of Cayman Islands

Mr. Chris Humphries LinkedIn profile, indicates that:

“I am a Cayman Islands attorney and Managing Director of Stuarts Walker Hersant Humphries – a leading specialist Cayman Islands investment funds practice”

According to Mr. Patrick Agemian LinkedIn profile, his official address is Cayman Islands.

Mr. Block didn’t provide any explanation with regards to his Directors appearing in the Paradise Papers or the publication of his funds domiciled in Caymans or Delaware.

The Fugitive Trader

An innocent article in Bloomberg stated that “Indicted Traders Found to Have Former Links to Muddy Waters Founder”

After careful reading, it is apparent that the article wasn’t so innocent, the two Israelis Dov Malnik and Tomer Feingold are facing accusations of involvement in an international insider trading ring, it was also asserted in the article that both Israelis have close relationships with the founder of Muddy Waters LLC founder Carson Block.

According to the article: “Both men played crucial roles in research and trading during the early years of Muddy Water. However, the professional relationship between the three men broke down in 2014.”

According to Israeli sources, the relationship never ended in 2014, and the trio kept in touch until very recently.

It was suspected that the duo were illegally selling company information to outside sources.

Between 2013 and 2017, Feingold and Malnik allegedly received a large amount of confidential information regarding potential deals and acquisitions from a currently unnamed local securities trader. This allowed the two to make millions in illegal profits.

Later it was published that they were sentenced to 30 months in prison for role in international insider trading scheme. Malnik pleaded while Feingold is a fugitive, according to prosecutors.

Both traders are suspected of secretly holding stakes in Muddy Waters, who split their activities to protect the company in the wake of the FBI investigation, and other sources suggest Carson Block backed the two until 2020 and had a stake in their business.

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