Last week, we are honoured and grateful to be able to have the opportunity to share our thoughts and to have a sincere and productive conversation with the top management team at the regulatory authority in Singapore about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. Accounting information can be used to inform – or to deceive. We believe strongly that this potential fintech platform that combines accounting data, especially footnotes, with a wide array of contextual information – including unusual related-party transactions; money-go-round off balance-sheet activities; governance, group structure and ownership analysis; textual and linguistic analysis; analysis of event-based “catalysts” (information-based manipulation) and sensitive market announcements (action-based manipulation in prices and volume) – will provide fresh insights and actionable, dynamic, inter-connected analytical information, as opposed to merely descriptive static data or a loose bag of disparate red flags, on Singapore and Asian companies, for the regulator and the public.
Public disclosure of the List of companies in the highest risk decile by the five fraud categories (tunneling fraud; grand capex fraud; M&A deals potion fraud; all-in-the-family expense and liability shift; consolidation craftiness fraud) on the regulatory websites to inform and educate public (Financial Literacy 2.0) can (a) prevent harm before fraud happens, and (b) spur the potentially fraudulent firms to act to improve their corporate governance, e.g. return back part of the expropriated “missing cash”, to get themselves off the List. This will also bring about greater efficiency in the overall regulatory system given the limited resources in going after so many fraudulent cases which may occur and implode systematically during poor market and economic conditions (e.g. the reverse merger fraud wave in U.S. that was concentrated in 2011).
September 23, 2015 11:24 pm
Aim’s Chinese disasters offer cautionary tale for chancellor
If the UK Chancellor wants a cautionary tale for his initiative to link London and Chinese stock markets, he should look to the Alternative Investment Market.
This week two of the 45 China-based companies quoted on London’s junior market have either had their operations suspended or their shares. They are just the latest of a long string of Chinese disasters on Aim. Continue reading
Hong Kong fraud accused feared abducted in Taipei
Police in Taiwan are investigating the whereabouts of the chairman of a listed company on bail awaiting trial in Hong Kong for fraud, after reports he was abducted in New Taipei City on Sunday.
Wong Yuk-kwan, 68, who is also known as Wong Kun, is accused of defrauding the Securities and Futures Commission in a US oil field transaction. Continue reading
CFOs see earnings shenanigans in 20% of U.S. public firms
James Saft, Reuters | September 25, 2015 2:06 PM ET
If you think the fact that a U.S. company’s earnings conform to accepted standards means they are to be trusted, then allow me to introduce you to the 20 per cent of chief financial officers who disagree. Continue reading
SEC alleges fraud in failed takeover bid of Barnes & Noble
Fanya Exchange’s 36 billion yuan default ‘tip of iceberg’ in China
PUBLISHED : Friday, 25 September, 2015, 12:00am
Xie Yu firstname.lastname@example.org
Exchanges featuring products from garlic to rhodium are under scrutiny after Fanya metals case
Rhodium and steel to garlic and onion, you name it, they trade it. Hundreds of these so-called commodity exchanges, which have mushroomed across the mainland in a regulatory void and attracted 1 trillion yuan in investments, are now under the microscope. Continue reading
Oligarchs and Orchestras: Inside Luxembourg’s Secretive Low-Tax ‘Fortress of Art’ Warehouse; Fraud allegations against Swiss entrepreneur Yves Bouvier have cast a shadow on Luxembourg’s Le Freeport, a high-security, low-tax warehouse for art
24 September 2015
SENNINGERBERG, Luxembourg—Last year, David Arendt stood in a reinforced concrete warehouse at Luxembourg’s airport and welcomed wealthy collectors to his “fortress of art,” complete with high security, minimal taxes and discretion. Mr. Arendt warned that it would fill up quickly. Continue reading
Sebi may impose floor price for stock splits
JAYSHREE P UPADHYAY Mumbai
25 September 2015
The Securities and Exchange Board of India (Sebi) is likely to set a floor price for companies to qualify for stock splits in order to curb market manipulation. One of the proposals allows splits only in stocks priced above ~500 consistently for the previous six months. In a stock split, a company divides its existing shares and although the number of shares increases, their total value remains intact. Continue reading
Stash: SEBI to look into illicit arbitrage
21 September 2015
Widening its probe into suspected tax evasion and laundering of black money through stock markets, regulator Sebi is looking into illicit ‘arbitrage’ through derivatives trading from offshore locations. Also under the scanner are manipulation through ‘client code modifications’ in the past, although there has been a complete clampdown on this route for the past couple of years.
The Securities and Exchange Board of India (Sebi) was so far focusing on trades during the fiscals 2013-14 and 2014-15 in its fight against misuse of stock market platform for tax evasion and laundering of illicit funds. Continue reading
‘Sebi merger to help curb manipulation’
25 September 2015
The commodities regulator Forward Markets Commission (FMC) will be history soon and the market will have its new modern and autonomous regulator in Securities Exchange Board of India (Sebi) next week. The last chairman of FMC, Ramesh Abhishek says the merger will bring more certainty and transparency in the entire commodity space. In an interview with Shrimi Choudhary and Tarun Sharma, he said the market would see more new products and participants, thanks to the collaboration. Continue reading