Super Financial Scams: Unveiling Seven Major Scams and Thirty Tactics in Financial History

Author: (USA) Schilit, written by (USA) Wu Qianli, translated by
Publisher:
Publish Date: 2006-07-01
Features: Watered-down profit figures, suspicious write-offs, hidden expenses
Today, to please Wall Street, listed companies are increasingly using ambiguous and suspicious financial tactics, which are becoming harder to detect. To this end, The Super Financial Scams ingeniously analyzes several famous, (disastrous) fraud cases in history (including the well-known Enron scandal). The book's various checklists, charts, and appendices on basic accounting knowledge make the complex analysis easy to understand. At the same time, The Super Financial Scams teaches investors and analysts how to use the best tools and methods today to decipher complicated financial statements and identify early warning signs of a company's distress.
The decade from 1991 to 2001 began with President George H.W. Bush taking office and the economy falling into recession. Interestingly, a decade later, his son, President George W. Bush, occupied the White House while the economy stumbled and stagnated. However, during these ten years, the U.S. experienced an unprecedented prosperity period that profoundly impacted both ordinary people and Wall Street. Unemployment rates fell to levels unseen in generations, and stock market indices were almost daily setting new records. From 1995 to 1999, the Dow Jones Industrial Average grew by more than 20% annually for five consecutive years, a feat unmatched by the tech-heavy Nasdaq index, which surged by 94% in just one year in 1999. Yet beneath all this glittering surface, most investors' radar screens failed to detect the ominous signs of skilled financial fraud.
The beginning of this past decade was marked by the exposure of the large-scale banking fraud at the Bank of Commerce and Credit International (BCCI), followed by reports of fraud involving the drugstore chain PharMor, the retailer Leslic Fay, and the waste management company Waste Management Inc. Subsequently, more companies joined the ranks of fraudsters: storms at large health maintenance organizations like Oxford Health, the drugstore chain Rite Aid, and the notable software company MicroStrategy caused even greater pain for investors. The creative accounting practices of "new economy" companies made the situation worse. Investors suffered losses on a scale previously unimaginable. The financial damages alone from the Cendant fraud case reached $3 billion.
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:2006-07-01
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