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It was the $109,000 (U.S.) photocopying bill that hedge fund manager William Ackman, above, says made him realize how much he'd read and underlined before betting against bond insurer MBIA Inc. in 2002.

His law firm charged him for copying 725,000 pages of financial statements and other documents, 140,000 of them about MBIA, to comply with a subpoena. Following New York and U.S. probes of his trading and reports, Mr. Ackman persisted in challenging MBIA's triple-A credit rating for more than five years, based on his own research. Mr. Ackman may soon be proved right. MBIA yesterday reported a fourth-quarter net loss of $2.3-billion because of the declining value of mortgage-related securities it guaranteed. The independent research firm CreditSights Inc. this week said MBIA's credit rating may be downgraded. Mr. Ackman had warned that MBIA was magnifying its risks by backing instruments such as those based on loans to the least creditworthy home buyers. "It's in the nature of a shareholder activist to be persistent," says Mr. Ackman. "I've been persistent because it's an important issue. People are obsessive about stupid things. They are persistent about important things." In the MBIA documents, Mr. Ackman says he saw that the insurer was guaranteeing untested asset-backed securities. He also found a reinsurance transaction that allowed the company to play down a loss. MBIA agreed in January, 2007, to pay $75-million to settle U.S. regulators' inquiries into that deal. Mr. Ackman peppered rating companies and regulators with letters, e-mails and presentations criticizing MBIA's credit rating. He also got then-New York Attorney-General Eliot Spitzer, who was investigating Mr. Ackman's activities, to probe MBIA. Betting against MBIA and the No. 2 bond insurer, Ambac Financial Group Inc., helped Mr. Ackman's New York-based fund, Pershing Square Capital Management, to return 22 per cent to investors last year.

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SymbolName% changeLast
MBI-N
MBIA Inc
0%6.76

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