Morgan Keegan & Co, owned by Region's Financial Corp. (NYSE: RF), fired analyst John Gwynn last month for leaking information about his calls on shares of Fairfax Financial (NYSE: FFH) prior to their publication.

This is the latest chapter in an ongoing battle that includes a lawsuit filed by Fairfax accusing Morgan Keegan, Gwynn and a group of hedge- fund managers of conspiring to short the company's stock and then profit by spreading false rumors. Mr. Gwynn has since filed a libel suit against Fairfax.

Keegan stands by the quality of Gwynn's research, with a spokeswoman telling Bloomberg that "The evidence shows that Mr. Gwynn strongly believed in the accuracy of the facts in his report. The apparent advance disclosure of coverage has no bearing on the content or accuracy of the report. We continue to believe that the lawsuit is completely without merit.''

Nevertheless, this will give the proponents of a short-selling conspiracy theory some ammunition because it demonstrates that Mr. Gwynn was perhaps less than honest and it begs the question, assuming the allegations are correct -- what was his relationship with the person or people that he leaked the information to, and what did he get in return?

If Gwynn simply gave his research to someone in advance in exchange for money, that's one thing -- unethical and deplorable, but probably not altogether uncommon. But if he was paid for producing a certain viewpoint, it has the making of a major scandal.

Of all the naked short-selling crybabies, Fairfax appears to be the one that has produced the most evidence of actual wrongdoing, and this will be an interesting case to watch.

This one of those stories too juicy not to do a post on. An exclusive piece from Bloomberg discusses Fairfax Financial Holdings' (NYSE: FFH) allegations of a vast conspiracy of short-selling hedge funds determined to bring the company down. The company sued eight hedge funds for racketeering in 2006, and has alleged that a group of well-known short sellers -- James Chanos, Steven Cohen, Daniel Loeb, David Rocker, and Adam Sender -- have gone so far as to send an anonymous letter to a minister at a church attended by a member of Fairfax's management, asking him to make sure that executive Prem Watsa makes a "full confession".

Fairfax has done its best Overstock.com (NASDAQ: OSTK) impersonation in more ways than one. In addition to conspiracy theories, we also have accounting scandals and fundamentals concerns. In June 2005, Fairfax disclosed that the SEC had requested information on the company's use of reinsurance products. As of early August, the investigation was still ongoing.

Allegations flying back and forth also include Harry Potter and sadomasochistic orgies. You couldn't make this stuff up. This should be a pretty exciting story to follow.

Longleaf Funds, a long-term track record of excellent results, was featured in Barron's mutual fund section over the weekend. What is Mason Hawkins investing in? His largest position is in Dell Inc (NASDAQ: DELL) equaling 7.6% of holdings.

Japan was also a big theme with investments in NipponKoa Insurance, Olympus, Nikko Cordial, being all top holdings. Other Asian holdings included Chueng Kong and Fairfax Financial Holdings Limited (NYSE: FFH).

Mexico-based Cemex Sab De CV (NYSE: CX) also topped the list along with European holdings Renault and Nestle.

Regarding U.S. holdings, in addition to Dell, Ingersoll-Rand Company Limited (NYSE: IR) was at the top of the list.

One theme was certain, Hawkins is allocating a lot more of his capital outside the United States. Prior to this decade, Longleaf and Hawkins were not big international investors.