Accounting Rife with Estimates Haunted Toshiba

Accounting Rife with Estimates Haunted Toshiba

David M. Katz

9 September 2015

The Japanese conglomerate’s woes may have much to do with percentage-of-completion accounting.

Toshiba’s ongoing accounting scandal, which reached a peak on Monday, when the company announced a reported $1.9 billion earnings writedown involving fiscal periods reaching back seven years, has spotlighted a broader financial reporting problem that has bedeviled standard setters for years: how to keep fraudulent earnings management out of revenue recognition. Continue reading


SEC’s latest prosecution: it is possible to pursue individual auditors for missing signs of fraud they should have caught; SEC steps up enforcement actions against CPAs for cooking books; BDO to Pay $2.1 Million to Settle SEC Charges over False and Misleading Audit Opinions

Fraudit failure

Dan McCrum

| Sep 10 10:45 | 1 comment | Share

If you’re thinking about stock fraud, you don’t want to do it in the US where the SEC has both prosecutorial power and a desire to exercise it.

One other point to consider from the SEC’s latest prosecution: it is possible to pursue individual auditors for missing signs of fraud they should have caught, without destroying the audit firm in a repeat of the Arthur Andersen collapse.

Washington D.C., Sept. 9, 2015 — The Securities and Exchange Commission today charged national audit firm BDO USA with dismissing red flags and issuing false and misleading unqualified audit opinions about the financial statements of staffing services company General Employment Enterprises. Continue reading

Adviser on Chinese Reverse Mergers Is Charged in a Securities Fraud Case; Federal prosecutors call him something else: a “master of manipulation” who reaped tens of millions of dollars in illegal profits

Adviser on Chinese Reverse Mergers Is Charged in a Securities Fraud Case


Benjamin Wey has described himself as a “leading Wall Street American financier” who helped Chinese companies sell shares in the United States. Federal prosecutors call him something else: a “master of manipulation” who reaped tens of millions of dollars in illegal profits. The F.B.I. arrested Mr. Wey at his Manhattan home on Thursday and charged him with securities fraud, wire fraud, conspiracy and money laundering in an eight-count indictment unsealed in a federal court in Manhattan. Continue reading

SEC can pursue insider trading case against brokers: judge

Fri Sep 11, 2015 4:23pm EDT

SEC can pursue insider trading case against brokers: judge


Two New York stockbrokers must face civil insider trading charges brought by U.S. securities regulators, a U.S. judge ruled on Friday, despite a landmark appellate ruling that torpedoed the criminal case against them. Continue reading

Amtek Auto, Castex plunge on Sebi probe

Amtek Auto, Castex plunge on Sebi probe

10 September 2015

Press Trust of India

Mumbai, Sep 10 (PTI) Shares of Amtek Auto plunged 9 per cent, while that of its subsidiary Castex Technologies lost 5 per cent today after market regulator Sebi began a probe into alleged manipulation of the latter’s stock price. Sebi has begun a probe into alleged share price manipulation at Castex Technologies through forced conversion of foreign bonds. Continue reading

Stock manipulation: Asya Infosoft

Stock manipulation: Asya Infosoft

2 September 2015


The share price of Asya Infosoft jumped 1085% in just about 17 months despite negligible profits

Asya Infosoft (Asya) has been involved in several failed business activities in the past. Formerly known as Saya Housing Finance, it was into providing home loans. In 2008, Saya was suspended for not complying with the listing agreement. In the following year, the name of the company was changed to Asya Infrastructure & Tourism. A few years later, in 2013, after acquiring Ideal Systems, the company decided to pursue information technology (IT) services. As per its website, Asya undertakes software development, web designing and web development for its clients. However, it had revenues of less than Rs1 crore in each of the past 12 quarters and negligible profits. But the share price of such a company has jumped 1085% in just about 17 months. From a low of Rs7.80 on 10 March 2014, the price shot up to Rs92.45 on 21 August 2015. Asya is trading at a PE (price to earnings) of 159 times (past four-quarter trailing earnings). Are the investors extremely bullish or is this another pump & dump operation? Asya had an average daily trading turnover of about Rs1.49 lakh in CY2013, with about 53 trades each day. In CY2014, the average trading turnover jumped to Rs3.69 lakh and the average number of daily trades increased to 94. From January 2015 up to mid-August 2015, the trading volume averaged over Rs11 lakh a day with nearly 160 trades each day. It has just about 2,000 shareholders. At the time of going for printing, the stock got suspended on BSE for penal reasons.

Sebi orders Satyam’s Raju, kin to return Rs 3,200 crore

Sebi orders Satyam’s Raju, kin to return Rs 3,200 crore

11 September 2015

The Times of India – Pune Edition

Market regulator Sebi on Thursday ordered B Ramalinga Raju and his family, the former promoters of fraud-ridden erstwhile Satyam Computers, to return Rs 1,803 crore of their ill-gotten j money plus interest for over six-and-a-half years, which adds up to about Rs 3,200 crore. t Raju, chairman of Satyam Computers till early 2009, and some of his family members have also been banned from the market for seven years. Thursday’s order was issued as a rejoinder to Sebi’s own order of July 15, 2014. The Raju family had fudged the books at Satyamfor eight years till Raju admitted to the corporate and accounting frauds on January 7, 2009. Subsequent investigations revealed that directors and employees of Satyam, including its chairman, MD and CFO, had since January 2001 “connived and collaborated in overstatements, fabrication, falsification and misrepresentation of books of account and financial statements of Satyam Computers”, the Sebi order said.

The regulator found that the Rajus and their associates fudged the company’s accounts to “paint a rosy picture”, which helped maintain a healthy share price for Satyam. They then used unpublished price-sensitive information to sell those shares at a high price to make profits, Sebi said. Sebi has now ordered the Rajus to disgorge all their ill-gotten profits along with a simple interest at 12% per annum since January 7, 2009 till the day of payment. The regulator also said that since IL&FS Engineering & Construction in its former avatar as Maytas Infra had made unlawful gains, which still remain with the company under the new management, those gains should be returned.

NSEL investor group asks Sebi to probe FTIL role in NSEL scam

NSEL investor group asks Sebi to probe FTIL role in NSEL scam

Ashish Rukhaiyar, Ami Shah

2 September 2015


Mumbai, Sept. 2 — The NSEL Investors Action Group has written to the Securities and Exchange Board of India (Sebi) asking the capital market watchdog to probe the role of Financial Technologies India Ltd (FTIL) in the Rs.5,574 crore settlement scam at the National Spot Exchange Ltd (NSEL). Issues related to the company siphoning off funds along with insider trading and stock price manipulation need to be probed by Sebi, said the investor group. Continue reading

Criminal Charges Filed Against Nomura Traders For Skimming Off Bid/Ask Spreads, Making Millions In The Process

Criminal Charges Filed Against Nomura Traders For Skimming Off Bid/Ask Spreads, Making Millions In The Process

Tyler Durden on 09/08/2015 11:46 -0400

Nearly three years ago, we explained why when it comes to fixed income traders in the traditional, and very lucrative, over the counter market, “the days of rampant skimming on top of the bid/ask spread, and with them record bonuses for bond traders and salesmen, may just ended with a whimper not a bang, and all bond traders hoping to make millions by misrepresenting what the true purchase or sale prices are to buysider clients, even if completely voluntary on both sides, may want to seek employment elsewhere. Continue reading

How to Catch a Market Manipulating Spoofer

How to Catch a Spoofer

September 4, 2015
By Matthew LeisingMira Rojanasakul and Adam Pearce

What you just saw was buying and selling in the market for futures based on the U.S. government’s 10-year Treasury bond, which trades on the Chicago Board of Trade. This is where the spoofing alleged in HTG’s lawsuit took place. In that minute, orders were modified or executed more than 5,000 times. Continue reading