[Flashback] Tesco Was Warned Months Ago That Its Accounts Were At ‘Risk Of Manipulation’

http://www.businessinsider.sg/tesco-warned-in-may-commercial-income-was-at-risk-of-manipulation-2014-9/#.VOfxMhs5DIU

Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University

How do you mislay £250 million ($408 million)? Not a question that often comes to mind while searching for change down the back of a sofa, but it’s the question facing Tesco’s most senior managers today.

Tesco’s thin statement for its enormous accounting failure blames “accelerated recognition of commercial income and delayed accrual of costs,” but what does that mean? Continue reading

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Stock Manipulation: Noble Explochem

http://www.moneylife.in/article/stock-manipulation-noble-explochem/40521.html

Stock Manipulation: Noble Explochem

19 February 2015

Moneylife

Despite no business activity since 2006, in just over a year, the price of Nobel Explochem shot up by 1235%

Established in 1982, Noble Explochem (Noble) was a leading manufacturer of nitro-glycerine-based explosives. In April 2004, the government prohibited the possession, sale and use of nitro-glycerine-based explosives, leading Noble to discontinue its manufacturing activities. Continue reading

U.S. bank exec ‘cooked the books’ to hide bad loans: prosecutor

http://www.reuters.com/article/2015/02/17/us-fraud-tarp-trial-idUSKBN0LL10G20150217

U.S. bank exec ‘cooked the books’ to hide bad loans: prosecutor

Tue, Feb 17 2015

By Dan Levine

OAKLAND, Calif. (Reuters) – The former chief operating officer of a major Chinese-American bank in San Francisco knowingly “cooked the books” in an effort to conceal deteriorating loans at the height of the 2008 financial crisis, a U.S. prosecutor said in court. Continue reading

SEC vs. Big Four, dust has yet to settle; Chinese subsidiaries of the world’s largest accounting networks proved too big to ban in their spat with the U.S. SEC

SEC vs. Big Four, dust has yet to settle

19 February 2015

Xinhua News Agency

By Xinhua writer Wang Zichen

BEIJING, Feb. 19 (Xinhua) — Chinese subsidiaries of the world’s largest accounting networks proved too big to ban in their spat with the U.S. Securities and Exchange Commission. Continue reading

The problem with related party transactions

http://www.straitstimes.com/news/opinion/more-opinion-stories/story/the-problem-related-party-transactions-20150218

The problem with related party transactions

Lee Kin Wai For The Straits Times, 18 February 2015

RELATED party transactions (RPT) feature prominently in many corporate scandals around the world.

For example, the top management team of Enron used special purpose entities to manipulate profit. Cable TV company Adelphia Communications Corp guaranteed related party debts and provided extensive loans to its top executives. Continue reading

[Flashback] Anonymous analysts wreak havoc

http://www.afr.com/p/markets/anonymous_analysts_wreak_havoc_Omubyp8IPIL1kyUaPKsWfN

Posted by KOH Ngiap Hao, Year 4 undergrad at the School of Accountancy, Singapore Management University

An anonymous researcher releases a report questioning the accounts of a publicly traded company. Investors catch wind of it and sell. The targeted firm denies the allegations, but by then the share-price damage is already done.

That’s what’s playing out in Asia this week, with reports on Singapore-listed Noble Group and Sound Global in Hong Kong erasing about $US900 million of market value in a single day. For Andrew Clarke, director of trading at Hong Kong brokerage Mirabaud Asia, there’s something unsettling about that pattern when the sources of market-moving claims can’t be held accountable for what they say. Continue reading

Stock Market Manipulation on the Hong Kong Stock Exchange; The Manipulator’s Poker: Order-Based Manipulation in the Chinese Stock Market

http://eds.b.ebscohost.com.libproxy.smu.edu.sg/eds/pdfviewer/pdfviewer?sid=b1d3c2ce-e7f6-41e6-9f94-fe1807dd3fc7%40sessionmgr113&vid=1&hid=108

http://eds.a.ebscohost.com.libproxy.smu.edu.sg/eds/pdfviewer/pdfviewer?sid=975e07b2-b36c-472c-97a3-7c6e3b909489%40sessionmgr4001&vid=1&hid=4110

Posted by M Laavanya, Year 3 undergrad at the School of Accountancy, Singapore Management University

Stock Market Manipulation on the Hong Kong Stock Exchange.

Gerace, Dionigi1 Chew, Charles2 Whittaker, Christopher3 Mazzola, Paul1

Australasian Accounting Business & Finance Journal. 2014, Vol. 8 Issue 4, p105-140. 36p.

Abstract:

This study is the first to empirically examine stock market manipulation on the Hong Kong Stock Exchange. The dataset contains 40 cases of market manipulation from 1996 to 2009 that were successfully prosecuted by the Hong Kong Securities & Futures Commission. Manipulation is found to negatively impact market efficiency measures such as the bid-ask spread and volatility. Markets appear incapable of efficiently responding to the presence of manipulators and are characterised by information asymmetry. Manipulators were successfully able to raise prices and exit the market. This finding contradicts views that trade-based manipulation is entirely unprofitable and self-deterring. The victimisation of information-seeking investors and the market as a whole provides a strong rationale for all jurisdictions, including Australia, to have effective laws that prohibit manipulation and for robust enforcement of those laws to further deter market manipulation

The Manipulator’s Poker: Order-Based Manipulation in the Chinese Stock Market.

Kong, Dongmin1 Wang, Maobin2

Emerging Markets Finance & Trade. Mar/Apr2014, Vol. 50 Issue 2, p73-98. 26p.

Abstract:

This paper investigates order-based manipulation and its effects on investor behavior and market efficiency. Using a unique data set from the Chinese stock market, we show that (1) order-based manipulation affects market liquidity and trading behavior, (2) the manipulator pretends to be informed or expects to be seen as informed by choosing a “right” time to implement the manipulation, and (3) the manipulation rapidly changes investor reaction to the market order/depth imbalance in the short run, and the effect gradually drops during the postmanipulation period. Our results are robust to alternative measures and offer clear implications for both theory and policy.