Indicted Traders Once Played a Key Role at Muddy Waters (1)

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 LLC founder Carson Block before they split amid an acrimonious dispute.

Block said he was first approached by Tomer Feingold and then separately by Dov Malnik in 2010 after publishing a short-selling report on a Chinese company called Orient Paper Inc. Malnik and Feingold claimed to only have passing familiarity with one another at the time, when in fact, he said he later discovered, they were close friends.

Carson Block

Photographer: Anthony Kwan/Bloomberg

Malnik and Feingold played significant ...