Paulson cleared of negligence in Sino-Forest investment

A US federal judge dismissed a lawsuit against John Paulson that claimed the billionaire investor did not adequately research an investment in China’s Sino-Forest Corp that resulted in one of the hedge fund’s biggest losses, Reuters reported. Hugh Culverhouse, an investor in the New York-based hedge fund Paulson & Co, sought class-action status for fund investors and damages after Paulson’s fund recorded paper losses of roughly US$500 million on its investment in Sino-Forest. Muddy Waters, a research firm, published a report in 2011 alleging improper accounting at the Chinese forestry products company. The judge ruled that Culverhouse did not have the standing to sue Paulson.