SEC, Chinese Affiliates of Accounting Firms Near Settlement; Chinese Audit Firms of Big Four Accounting Firms Face Sanctions Over Document Sharing
MICHAEL RAPOPORT And JEAN EAGLESHAM
Updated Feb. 4, 2015 6:25 p.m. ET
The Securities and Exchange Commission and the Chinese affiliates of the Big Four accounting firms are close to settling a high-profile dispute that had threatened to complicate the audits and fundraising capabilities of dozens of Chinese companies and U.S. multinationals, according to people familiar with the situation. The prospective settlement would sanction the Chinese audit firms for refusing to give the SEC documents about some of their U.S.-traded Chinese clients that were under SEC investigation. Continue reading
Competition of the Informed: Does the Presence of Short Sellers Affect Insider Selling?
Massimo Massa INSEAD – Finance
Wenlan Qian National University of Singapore – NUS Business School
Weibiao Xu National University of Singapore (NUS)
Hong Zhang PBC School of Finance; INSEAD – Finance
December 9, 2014
Journal of Financial Economics (JFE), Forthcoming
INSEAD Working Paper No. 2014/63/FIN
We study how the presence of short sellers affects the incentives of the insiders to trade on negative information. We show it induces insiders to sell more (shares from their existing stakes) and trade faster to preempt the potential competition from short sellers. An experiment and instrumental variable analysis confirm this causal relationship. The effects are stronger for “opportunistic” (i.e., more informed) insider trades and when short sellers’ attention is high. Return predictability of insider sales only occurs in stocks with high short-selling potential, suggesting that short sellers indirectly enhance the speed of information dissemination by accelerating trading by insiders.
Posted by CHEN Liting, Year 3 undergrad at the School of Accountancy, Singapore Management University
The Securities and Exchange Commission (“Commission”) filed a civil injunctive action today in the United States District Court for the District of Columbia charging China Valves Technology, Inc. (“China Valves”), its Chairman and former CEO, Siping Fang (“Fang”), its former CEO, Jianbao Wang (“Wang”), and its CFO, Renrui Tang (“Tang”), with misleading investors about the true nature and price of an acquisition and by mischaracterizing and materially overstating income related to its purchase and reverse engineering of a competitor’s product. Continue reading
Posted by LIN Liye, Year 4 undergrad at the School of Economics, Singapore Management University
Sound Global is one of the players in the Chinese wastewater treatment industry and is engaged in the construction and operation of treatment plants, either as a contractor or as a BOT (build-operate-transfer) operator. A lumpy business segment allows it to slip in 40% of non-existent revenue and hide many cases of revenue exaggeration.
Posted by Joel CHUA Yong Sheng , Year 3 undergrad at the School of Business, Singapore Management University
NEW YORK – A former Singapore banker pleaded guilty in federal court in New York on Wednesday to helping Japan’s Olympus Corp orchestrate a US$1.7 billion (S$2.1b) accounting fraud. Continue reading
Posted by Katharine TAN Pei Shi, Year 4 undergrad at the School of Accountancy, Singapore Management University
FW moderates a discussion examining corporate fraud in Asia between Kanupriya Jain, practice leader for Corporate Investigations, at Control Risks, Denis Brock, a partner at King & Wood Mallesons, and Matthias Oberlinner, a director at Siemens Ltd.
FW: How would you characterise perceptions – both from outside the region and internally – of corporate fraud across Asia? Continue reading
Posted by John SOH Yong Ye , Year 4 undergrad at the School of Economics, Singapore Management University
The Ontario Securities Commission is considering setting up Canada’s first whistleblower program, offering to pay up to $1.5-million to people who provide tips on securities crimes that lead to major prosecutions. Continue reading