Breakingviews

Review: Two centuries of trust, frauds and finance

By Edward Hadas
January 2, 2015

Ian Klaus’ entertaining account of 19th century financial deceptions carries a serious lesson. As financial markets became more sophisticated, trust had to be built on stronger and more objective supports. The implication: honesty can always win out, but not without hard work.

Accounting fraud is ripe for fresh scrutiny

December 30, 2014

Dodgy numbers will replace insider trading as U.S. watchdogs’ preferred prey in 2015. New auditing and analytics arms give the SEC a head start, even if SarbOx reforms make cases harder to track down. With the likes of SAC chastened, it makes sense to refocus on the next Enron.

Why investors were taken in by Gowex

July 11, 2014

The scandal-hit Spanish wifi provider raised many red flags. Why were they all ignored? Because more people benefit when companies flourish, and Spain needs success stories. Gotham City, Gowex’s nemesis, did everyone a service, but its work shouldn’t have been necessary.

Gowex collapse leaves egg on many faces

July 7, 2014

The Spanish wifi provider has said its CEO admitted falsifying the accounts, days after short-seller Gotham City attacked the company. Gowex’s status as a poster child for Spanish entrepreneurialism means the fallout will go beyond increased risk aversion to junior listed stocks.

Vatican bank struggles to be cleansed of past sins

By Pierre Briancon
March 21, 2012

JPMorgan has closed the Holy See’s account due to a lack of transparency. The Vatican is also straining to be admitted to the list of countries that comply with anti-fraud and money laundering rules. It should either close the bank, or come clean about its shady past.

Caterpillar’s Chinese lesson: dig below top line

January 21, 2013

Getting stung by accounting fraud is unfortunate. But Caterpillar’s $580 mln write-down - three-quarters of the price it paid for ERA Mining just last year - suggests a bigger misjudgment. The Chinese machine maker’s potential was clear, but so was the low quality of its growth.

Time to pull the plug on NY’s Hank Greenberg suit

April 11, 2013

The fraud case against the ex-AIG boss has already outlasted two of the state’s attorneys general. After losing a ruling Wednesday, a third AG should fold. His office is plenty busy pursuing financial-crisis cases and other scams. It doesn’t need this eight-year-old distraction.

Goldman’s CDO investors: fools or victims?

By Hugo Dixon
April 19, 2010

Were the investors who lost $1 billion by buying a fearfully complex product sold by Goldman Sachs in the dying days of the credit boom fools or victims? That's the key distinction on which the U.S. Securities and Exchange Commission's fraud charges, which roiled the investment bank when they were unveiled on Friday, hinge.

JJB eyes Sports Direct with cash call

October 9, 2009

Why put cash into JJB Sports? Investors are apparently so keen to do so that the sports retailer expects to raise 100 million pounds — more than its market capitalisation of just over 80 million.

Citi’s Mexico fraud besmirches industry further

February 28, 2014

The mega-bank has been cheated out of $400 mln by an oil services firm in one of the most basic businesses in banking – accounts receivable. Citi’s Banamex didn’t even spot it – Mexico’s government did. Missing such simple fraud is something that should worry Citi’s rivals, too.