Dan David, co-founder of the financial information website GeoInvesting, is not a man to beat about the bush when it comes to corporate fraud.

The company – based in the rural American town of Skippack, about 50 kilometres northwest of Philadelphia – has made a name for itself by uncovering a steady stream of lies and deceit practiced by US-listed Chinese firms.

Enthusiastic about the long-term growth of these firms, 43-year-old David initially doubted some of the stories that were being circulated. So much so that the company initially started researching US-listed China stocks in August 2010 to refute the evidence of short sellers such as Muddy Waters Research and Alfredlittle.com. But GeoInvesting’s research showed that fraud was rampant and being done on a massive scale, David said. The short sellers were correct.

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