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
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
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
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
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
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
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.
Posted by M Laavanya, Year 3 undergrad at the School of Accountancy, Singapore Management University
The Impact of Fraudulent False Information on Equity Values.
Ullah, Saif1 sulla@jmsb.concordia.ca Massoud, Nadia2 nmassoud@schulich.yorku.ca Scholnick, Barry3 barry.scholnick@ualberta.ca
Journal of Business Ethics. Mar2014, Vol. 120 Issue 2, p219-235. 17p. 9 Charts, 4 Graphs.
Abstract:
There are two types of stock price manipulation examined in the theoretical literature: (1) insider trading, which involves private information that is true and (2) the public spreading of fraudulent false information. While there is a large empirical literature on insider trading, this is the first empirical article to examine the impact of false, fraudulent public information on stock prices and trading volume. We find that such false information, even after being denied by a credible source such as the SEC, generates both abnormal returns and abnormal trading volume. We also find that the effects of the false information on security returns and volume can be persistent for at least 2 weeks. In addition, we show that perpetrators of false news attacks can make potentially large profits from such market manipulations.
AsianExtractor: Unearthing Accounting Fraud in Asia 