Appalling revelations in the Daily Telegraph over the weekend about how a London-based hedge fund set up a "dirty tricks unit" to manipulate share prices and get information illegally about companies.

For the benefit of those who are unfamiliar with the work of hedge funds, the investment vehicles make millions "short-selling". Totally legal and nothing wrong with that. "Short-selling" means you are selling shares you have borrowed to buy but which you don't actually own. The idea is to sell them in the expectation that the price falls, allowing you to buy them back and return them at a massive profit.

The allegations include claims that:

- an American-based private detective hacked into the corporate email systems of two firms in which the hedge fund had an interest.

- Jurors were "tapped up".

- Sources were bribed to provide valuable inside information.

- A bogus firm, with a phoney Internet address, was set up to allow employees to pose as independent researchers to collect information on companies' future.

Still, you can't do much about rumor mongering in the market, which would make a dirty tricks unit inevitable. Indeed, it could even be argued even that rumor-mongering lends liquidity and price discovery.

As journalist Ross Clark points out, hedge fund operators have always worked on the dark side of rumor. That's how they make their millions