Day: August 30, 2015

Goldman Sachs Investment Advisory has withdrawn its business from the Korean market amid criminal investigations into allegations of stock price manipulation in conveyor belt maker Dong Yang P&

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Goldman Sachs Investment Advisory closes Korean unit

28 August 2015

Maeil Business Newspaper

Goldman Sachs Investment Advisory has withdrawn its business from the Korean market amid criminal investigations into allegations of stock price manipulation. According to sources Thursday, Goldman Sachs Investment Advisory shut down its Korean business as of August 21. Regulatory approval to the business withdrawal was granted, which was posted on the Financial Services Commission website. Continue reading →

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Troubled Hanergy Thin Film Power announces massive layoffs and losses after some related-party transactions cease

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Troubled Hanergy Thin Film Power announces massive layoffs and losses
PUBLISHED : Saturday, 29 August, 2015, 2:30am
Jing Yang and Langi Chang
Embattled solar panel maker Hanergy Thin Film Power Group unveiled a sweeping restructuring plan late on Friday that will eliminate over a third of its workforce, while reporting its first half-year deficit in six years. Continue reading →

The Modus Operandi of Loan Frauds and Forewarning System to Prevent Frauds

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http://economictimes.indiatimes.com/industry/banking/finance/how-corrupt-banking-system-creates-a-mountain-of-bad-loans-makes-recovery-process-complicated/articleshow/48724651.cms?prtpage=1

How corrupt banking system creates a mountain of bad loans & makes recovery process complicated

By Suman Layak, ET Bureau | 30 Aug, 2015, 04.15AM IST

Loan FraudLoan Fraud Forewarning System Continue reading →

‘Every market misconduct, dubbed scam, has taken capital market back by 10 yrs’

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“Then we come to the question of related party transactions. In the Companies Act, only if you are directly related to that particular transaction, you are debarred from voting, but other promoters can vote. In a firm, a certain product was purchased from a private company belonging to the the wife of the promoter, and she held 2% of the share in that company. So only she was debarred. Under Sebi rules, that cannot happen. In our case, we have said that irrespective of whether you are party to that transaction, we are going by the concept of whether you are a related party or not.”
‘Every market misconduct, dubbed scam, has taken capital market back by 10 yrs’
Somya Lakhani
23 August 2015

Short interest and stock price crash risk; the relation between short interest and crash risk is driven by bad news hoarding and is more salient for firms with weak governance mechanisms, excessive risk-taking behavior, and high information asymmetry between managers and shareholders

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http://www.sciencedirect.com.libproxy.smu.edu.sg/science/article/pii/S0378426615002204

Journal of Banking & Finance Volume 60, November 2015, Pages 181–194

Short interest and stock price crash risk

Jeffrey L. Callena, , Xiaohua Fangb, , 

Highlights

  • We find evidence that short interest is positively related to future crash risk.
  • The evidence is in line with the view that short sellers detect bad news hoarding.
  • Additional findings show that the relation is more salient for specific subsamples.
  • Empirical support is provided for the main relation observed above.

Abstract

Using a large sample of U.S. public firms, we find robust evidence that short interest is positively related to one-year ahead stock price crash risk. The evidence is consistent with the view that short sellers are able to detect bad news hoarding by managers. Additional findings show that the positive relation between short interest and future crash risk is more salient for firms with weak governance mechanisms, excessive risk-taking behavior, and high information asymmetry between managers and shareholders. Empirical support is provided showing that the relation between short interest and crash risk is driven by bad news hoarding.